As usual, it ends up being about emulators instead of creating new stuff.
Well, PSP(and DS/3DS) homebrew scenes were(and still are) amazing, with many brand new games created from scratch, even though any potential users have to hack their devices in the first place to even try them.
Then came Android/ios and bothering with a hacked PSP was no longer worth it for general computing purposes. Running "backups" and emulators prevailed as the only reason to mod a handheld.