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Why isn't the advance Wars Series on the PSP?

Answer:
Because it's just not made for the PSP.

Actually, Advance Wars is the intellectual Property of Nintendo, not a third party which is why it is made for the Nintendo systems ie. game boy advance, Nintendo DS, DS lite DSi etc... only. Nintendo seldom if ever licenses thier games (IP's) to other platform developers. Intellectual properties or games are designed and sold to sell the hardware (the handheld gaming device) and in this case Nintendo is using thier own game Advance Wars to sell the system they themselves have created The GBA, DS Lite etc..

Nintendo doesn't want to sell more SONY Products, they want to sell more NINTENDO Products, which is why you will never see Advance Wars on the PSP (legally).

There never have been talks between the two competitors, Sony and Nintendo to bring the series to the other platform, something almost unhead of in the gaming industry, I did say ALMOST unheard of. there have been a some IPs such as Sonic, usually appears under NIntendo, now appearing under Microsoft or PSP license but that's because Sonic is a third party and has no stake in on handheld doing better than the other.

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