I'm not sure they were knowingly targeting a older demographic so much as the demographic that had a PS1/PS2, which would've been a wide-range of gamers. Sony's statements around the DS and PSP launch make it pretty clear that they weren't avoiding competeing with the DS at all--they were certain they would wipe it off the face of the earth with their powerful handheld console.
A lot of this, "Oh, Sony didn't want to compete with the DS! They'd get killed!" is pretty funny because it's all coming out of hindsight where the DS is a superpower and the PSP is, at best, a succesful also-ran. Remember, when the PSP hit the DS had next to nothing going for it. Nintendogs wasn't out; the new Sonic and Mario hadn't graced the console. There was no brain training, nothing. Nintendo, in fact, looked like it was straining to do something, anything different to avoid being demolished by Sony's megaton entry into the handheld market. Read some quotes and news srticles from just before the PSP launch; Sony was seeking to run Nintendo off the road.
But, icrusie, I do agree with you, that the PSP, in its execution if not in its conception on the Sony drawing board, has appealed to and been marketed to an older audience, not so much by the software (they kids games in Daxter, Ratchet & Clank, LocoRoco, etc. are still there), but in the price point and fragility of the system (relative, compared to the tank of a DS) have made parents a bit hesitant to get it for little Billy, when he might drop it and break a $200 piece of tech. Thus, where the DS appeals to the total spectrum of gamers and non-gamers, the PSP is really only fit for 20-somethings with some extra a cash and a childhood filled with playing games. It's really the same audience target difference as the Wii and PS3 have going for them right now in the TV console world.