The PSP is powerful enough that if they brought it to PSP it would almost definitely be a remake rather than a port. If they are going to do a remake anyway, it would be considerably more profitable on DS, due to a combination of lower development costs, the widespread populatrity of the DS, and perhaps even the possibility of using a modified FFIII engine.
edit: Also, touchscreen functionality would be useful for the ATB system, slightly more realtime. I don't know how FFIII uses the touch screen, as I haven't played it, but this would work well in FFVII for sure.