Yeah, I agree, that's an issue. The truth is, however, that the games themselves are at least on par with the PSP in terms of graphical muscle, but that point isn't getting across at all in their marketing. Hell, even the mainstream gaming magazines aren't commenting on it.
Ridge Racer is actually pretty impressive visually; it process real-time reflections off the windows and shiny surfaces of the cars. In the last generation, I only saw the Xbox doing the same thing.