As for handheld gaming dying, I doubt it. As long as dedicated handhelds keep getting games like this, and unless the competition (iOS and android) get standard controls, they are still two different beasts to me.
It seems what you really want is a cell phone, not a portable game console. I'd say just stick with the phone and save yourself 250-300 dollars. Personally, I think those phone games lack gameplay. They're good for a moment of free time, but I used to take the bus for two hours to get to school and two hours is way too fucking long to play angry birds. Unless what you mean is that you want cheaper games, in which case you've got a huge selection of psn minis that range from .99 - $5.
Having a console like experience from a handheld is exactly what I'm looking for.
I own an iPad and iPhone and I highly doubt any of the games can even remotely compare to LBP,Uncharted,Resistance,etc. The majority of Mobile games are simple time killers,PSV games will be "real" games and I'll gladly pay $40-50 if the quality is there.
Check out Sound Shapes (my personal favorite of the games announced so far) and Escape Plan. They seem to fit what you're looking for. Though that only seems to leave two games for you. Maybe in a year or two when the library has had some time to develop you'll find something, also price drops.
Yeah it's like a requirement to end every portable article with negativity of the future. If phones do anything it's shrink the handheld gaming market to the "veteran" gamer, which means the market is us readers of Destructoid and every other videogame dedicated site. Every gamer I talk to agrees that phone gaming is nice, but it's not a proper substititute for a dedicated handheld gaming system. I understand why sitesthat don't cover videogames on a regular basis feel this way towards dedicated handhelds, but I'm baffled at how so many videogame websites believe a phone without physical buttons is on par with with handheld gaming. Sure phone gaming has it's moment, but comparing it to a dedicated handheld is insulting.

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