I noticed they released Patapon 2 at $20 as a test case for digital distribution, and they have games in the UMD Legacy section of the Playstation Store in the $6-$23 range. If that's how they're thinking of pricing new games going forward, then it's absolutely the right way to go. At those kinds of prices the Playstation Store will compete hard with Gamestop's used PSP market and win head-to-head on titles that are hard to find or otherwise sold out in stores. Sure, Gamestop beats the Playstation Store on Wipeout Pure now, but what about in a year or two if Sony commits fully to making the digital model work at prices like this? I dunno...
Personally if I didn't already have a perfectly-working PSP-2000 I'd be keeping the PSP Go in mind.