It's something like that. IIRC, Rand turns on Asakim once it becomes clear that Asakim is tormenting Setsuko in exceptionally cruel ways to try and make her produce the Sphere he needs. Basically Rand figures out he's being used. There's a scenario on the Special Disc where Rand and Setsuko team up.
Asakim's deal is (again IIRC) that he's immortal due to his bond with his robot and he desperately wants to find a way to die. The best way he's discovered is find all the Spheres and collapse the known multiverse, which would destroy everything (including himself).
Setsuko's Sphere is activated by despair, so to get it, Asakim needs to make her as miserable and hopeless as possible. He tries to do this by murdering all of her friends and then impersonating her dead lover so he can betray her. Mail also has a Sphere that's activated by something-or-other, which is why Asakim hangs around Rand.
As for Z2 being handheld, remember that the PS2 is no longer a viable system and the PS3 is not actually very popular in Japan. The PSP is actually the most popular video game system in Japan right now, since it combines graphics and portability. So Banpresto is probably just doing what they've gotta to get the game published.
That said... I bet Terada probably pushed to have this released on the PS3 as an insanely long 2D game (probably similar to Impact, which looked and played like a really long PSX-era game). PS3 games sell like complete ass compared to PSP games in Japan, though, while having way higher production costs.