5 years ago, the PSP wasn't new tech either. It was existing tech that had been shrunk sufficiently to be reasonably portable. That has always been part of the value proposition of portable electronics - they provide us previous tech that was either only possible as a set-top device or at least much bulkier, now in a more conveniently portable, more easily carryable form.
Existing models of the PSP are not the be all, end all of portability because of their physical bulk and because of the baggage of physical media. There's a new class of portable devices that are truly pocketable, completely eschew content delivery on a physical medium and have robust processing power. This is proving a popular combination of factors for a lot of people interested in portable devices.
Some of you trying to base your arguments in the logic that the PSP Go does not have a "good reason" for existing don't really understand the portable space or its roadmap and, more to the point, are simply making a cognitively dissonant argument about what is nothing but a luxury purchase. There was no "good reason" that justified the purchase of a PSP in the first place, as with any other luxury purchase. What justified the purchase was a subjective set of preferences, nothing more, and the current market for portable entertainment electronics have demonstrated that they can happily justify greater pocketability and pure digital delivery to themselves.
The PSP Go allows the PSP product line to compete in this space, while still leaving the option for anachronistic customers to buy an older model based on earlier benchmarks of the portable space.
