Mind, if it was just a notch above DS processing wise, they would have been able to price it more competitively.
I agree with this. I really liked that Sony tried to make the Vita more than just "PSP with more oomph". There are a bunch of extras in the system that allow for developers to really explore different game play possibilities, like the extra stick, the capacitive screen and the back touchpad. The 3DS's functional* additions were basically the camera (also in the Vita) and an analog directional (also in the Vita), which seems rather lacking overall.
* I'm pretty giddy about 3D, but I'm talking about features that can be used to expand what you can do in games, and the visual elements added by depth aren't going to be utilized for this sort of thing very much.
edit: oh, crap, I forgot about the motion stuff in the 3DS! That's pretty big, I will admit, though "also in the Vita" still applies.