Downloadable content will only work when there isn't a hardcopy alternative. If the ONLY option was to buy PSP games at full price and never resell, and so long as PSP is a good platform, people might do it. No one will do it if they have the UMD option though.
That's gamecube. PSP is 1.8GB but games sold via PSN are in a compressed format so they end up a bit smaller.
even if the games become cheaper it likely be never in our house... I need cartridges and cds... I need to be able to hold my games I can still play those old games, who says you can play your downloaded games when the servers go down and your console/mc breaks down? PSPgo? I say no xD