Finding a full-fledged gaming experience that fits in less space than a three-minute MP3 song sounds impossible, but thanks to advanced compression techniques (CSO compression), audio downsampling, and removal of unnecessary localization files, it is very much a reality.
This is the exception to the 3D rule. N.O.V.A. is a Halo clone for PSP. While the original ISO is ~200MB, a "RIP" version (removing multiplayer maps and high-res textures) can squeeze down to the upper 40MB range. The framerate takes a hit, but the campaign is fully playable.
Based on extensive research from multiple sources, here are the best PPSSPP games available under 50MB, organized by genre.