The ill-fated UMD was never going to make it into the Vita – it didn't really have anything going for it outside of it being pretty difficult to damage and Sony have spent a couple of years trying to distance themselves from it. The digital-only PSP Go also had an issue with getting your currently owned UMDs onto the system and now the Vita will suffer the same problem; if you went out and physically bought a copy of a PSP game, you would be unable to play it in your Vita.
That is until the UMD Passport system was announced for Japan. By registering your game onto your PSP, you would be entitled to a sizable discount on the digital version of that game for the Vita. It wasn't the perfect system, you still had to pay for something you'd paid for before, but it was acknowledgement that Sony hadn't forgotten your support of their last system.
Kotaku has been told that the UMD Passport won't be coming to the States, we can presume that means nothing for Europe either. Why that would be, Kotaku don't say, but stay tuned for an official word between now and the 22nd. You can still use any digital titles you've previously purchased, so I guess the PSP Go actually did have a redeeming feature.