The PSPGo is actually quite a nifty device despite not being able to play all games via UMD. The screen is of higher quality than any other model, it has a much more sturdier build, it is extremely portable rivaling the DSLite, you don't have to worry about the bulk of physical media, and you can connect a Dualshock 3 to it using Bluetooth.
All that said, the PSPGo should've been more competitively priced, but remember the Go also has 16 GB of onboard memory. Nonetheless, Sony clearly wanted to test out the digital distribution market before deciding on the final specs of the PSP 2. So yeah, customers are basically paying for a glorified marketing experiment.
