Hackers continue to chip away at the PSP despite Sony's security upgrades, hackers are able to run their own software on even the latest version of the PSP firmware. The hack depends on using a malformed saved game from GTA Liberty Stories, and therefore seems to flow from a problem with that software rather than with the PSP firmware itself. As a result, it's not clear whether Sony will be able to patch this hole.
The underlying concern is that hacks such as this may soon develop into pirating software for the PSP. However, no hacker appears to have achieved that to date.