I know you're being sarcastic, but...
I think 3rd party relations are better now, but yes, that has definitely fucked them in the past. I don't think it's as relevant now, so I'll give you that (GC was really a wake-up call for them, I think)...
The DS definitely has an expensive, low storage format (relatively speaking).
I don't know about the difficult development environment, but with two CPUs (it's an ARM7 and an ARM9, right?) vs the PSP's single powerful CPU, it seems that the PSP is both more powerful and likely easier to develop for. I don't really know much about either, though, so maybe someone working on either platform could chime in here.
Nintendo has never been about power, they've always been about giving us what their competitor gave us last year + about 10%, but a couple of years later so it's not nearly as shiny and new by the time we get it. In this case the DS is looking pretty damn half-assed as far as technology goes...they've never, ever been about having the most expensive chipset, so I have no idea where you are coming from.
The media is likely to be a problem for Nintendo, although this newfangled memory may be cheaper than mask or flash ROM, I seriously doubt it will be cheaper than an optical disc, and probably takes longer to manufacture as well. So they are definitely repeating that mistake, and it is a pretty big mistake IMHO.
At least Nintendo isn't last to launch this time
(BTW, I'm planning to get both DS and PSP. I gotsta get my Driller on
but I'll be honest, I think the PSP is a far more interesting machine than the DS. I'm still waiting for some GAMES that use the touchscreen well - most everything at E3 was a tech demo that I might pay $5 for, but not really anything fleshed out enough to be a $30 game...)
(still reading
There is one thing that keeps you from selling your GBA for a DS - and that is the link cable. Considering that the most popular GBA game is Pokemon...
Consider it the "backlight" of the GBA or the "headphone jack" of the SP
It's all about the Nintendo Difference