Ultimately, regardless of what the propaganda states, copy protection actually inhibits hardware sales. Ethics and justice aside, piracy has always been a contributing factor and a key component influencing hardware sales since the dawn of the first 'record-at-home' device. Cassette tape players were popular not because of their sound quality, but because of their ability to retain someone else's music for your own at the cost of a blank cassette and a little time.
The only way Sony can combat this development is to release AAA titles immediately - and lots of them (upon NGP's release of course). The problem is: by the time NGP makes it to shelves, Nintendo will have already dominated marketshare and taken everyone's money....again.
It's not looking good for Sony's latest handheld. Let's hope the Xperia Play can win back some business for them.
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