It can definitely be done, because Onlive was released on phones. I had it for Xperia Play. It worked best on WIFI of course, but it worked, and was sweet! I heard they were getting back into Mobile gaming, but it seems like only to push Playstation Now to other devices other than their own, and to make smartphone games, similar to how Nintendo is doing, to bolster their franchises and sell more console copies. Probably an endless runner God of War, or a side story Killzone, since after all, FPS games are pretty numerous on the touch screen platform. Mobile gaming on smartphones is huge and they would be foolish not to get in on it. Of course, to make an Xperia Play 2 would be awesome, and allow for more of their original titles to be released, and there was a HUGE backing for the Xperia Play, with 1000+ Xperia Play optimized games on the market. Developers knew the Play, loved it, and updated their games for it at a rapid pace. They can make the new Play compatible with the old Play API as to still have that backward compatibility. I guess it all depends on how successful ForwardWorks is with the mobile gaming push.
I was thinking of Temple Run: Featuring Nathan Drake or a Twisted Metal racing game akin to the Asphalt series with guns (even though Asphalt itself is practically a copy of the Burnout series). Maybe a Last Guardian virtual pet. Although something like Killzone Mercenaries might port fairly well. There's some potential, but I won't hold my breath. They said the same thing would happen with PlayStation Mobile. If they want to get serious about it, then good. And if the goal is to push more console sales, then I think finding new ways to push Remote Play would help. PlayStation Now may also help. While it might not lead to direct console sales, it would be a source of revenue and would also increase awareness of the PlayStation branding, as long as it's done right.
Don't get me wrong, I still really hope for a proper Xperia Play 2 more than anything. Sony already has made APIs for using DualShock 3 and 4 controllers available to developers after dropping the Play. I've not looked into it, but it may be related to the gamepad API for the Play. Or it may just be a Sony-only thing enabling Android's native gamepad support on their phones. Either way, if they just stuck with that and integrated the controller into a more portable package they very well could accomplish something close to it.
We're saying the same thing. I just wish there was a way to suggest such ideas to Sony (whether they'd listen to them or not).