The PS2 is still in production isn't it? The PSone was still officially in production until 2006!
I wasn't saying it is a retro console but like Harrison says, there are some great games on it that are still well worth playing, just as there are on the PS1... and on the Amiga! If I bought a PS3 I wouldn't suddenly ONLY want to play brand new games.... backward compatibility would mean I could play any game I'd bought in the last 15 years (almost... I was probably still buying Amiga games in '94!) on one machine. It's a kind of redundant point here with most people owning many consoles anyway but I only ever have 1 set up in the living room... the Amiga, C64, Acorn Electron etc (and another PS2) fight it out over a portable upstairs.
In fact, I'd argue that the current generation of consoles have yet to come into their own. There are big graphical improvements but more in detail and realism than a huge shift eg from the likes of the Amiga to the first PlayStation which was huge and opened up a different gaming experience. Likewise, the PS2, while not as huge a leap, made games like GTA3 possible - a totally different playing experience to the likes of Driver or the original GTA games. I've yet to see anything on PS3 or 360 that blows me away by any measure other than detailed graphics. I'm sure they'll get there when someone fills up a blu-ray disc!
I agree with the small screen thing as well... I also have a little PSone with the Sony screen and that makes the graphics look great (3rd party screens aren't so good - the resolution is too low and small writing etc becomes illegible!).