See the recent threads about whether people would buy a DS at $150 or a PSP at $300. Even with the DS at $150 there were a significant number of people that weren't interested. There's a mentality that portable should equal cheap, regardless of whether the technology is any less advanced than console hardware. I don't see any consoles sporting built-in Wifi or nice, sizeable built-in LCD displays, yet everyone seems to think portable hardware should cost less than console hardware.
That's why it's time to look elsewhere for userbase.