I don't know much about the PSP except some technical data i am just looking up, but I think this wouldn't work well for several reasons.
I don't think that many people would like to play it on the PSP. Therefore the development effort would not be worth doing it. Supporting another platform includes a lot of risks, and could reduce the time available for the already supported systems, except when new employees are hired and get aquainted with TTGs development tools. The first costs a lot of money, the second a lot of time.
The PSP has a really modest resolution. 480 × 272 would make everything very small. but at least the Aspect ratio doesn't make it even worse. 480x270 would be the closest 16:9 resolution.
Here's an example in that resolution.

It doesn't look too bad, but i don't know if it would be fun to play that way. Not to forget that it would be even smaller, because the Display is only 4,3 inch. You can measure the image on your display to get the idea.
This one i can only guess, but it is possible that the performance would be terrible. However it might be that it has some efficient chips for handling 3D GUI. The requirements for the application level computations, such as moving objects are probably not too high for it to handle.
In any case a lot of code optimizing especially for that plattform might be necessary, which would require experienced and therefore expensive personal, or developers who don't mind spending several month on learning how to develop for the PSP properly and efficiently.
I am sure you can now imagine that it's not as simple as pressing a button or running a cross compiler over the same code. The PSP doesn't support DirectX, which would result in a lot of development effort on the GUI level.