Shut up and think about it before you try to go "but da PSP is weaker than the PS2!!!"
Since it has what is essentially exactly the emotion engine in it, plus a decent bit more RAM (despite the chunk ostensibly taken out for running the OS behind it), it should definitely be doable.
What I'd guess would be the best route to take is to do a similar thing to how Sony did the PS1 emulation on it, which is to pre-convert games to tell them to handle protocols a specific, special way beforehand. That'd rule out any differences between the hardware and let the games run natively.
Has no one else given thought to this?