To me psionics are a special kind of magic, the magic that comes, not from training or study, but from the harnessing of internal energy. I've never understood the school of thought that said that psionics have no place in a fantasy world. Magic that doesn't require gestures and magic words is what fills most fantasy novels and movies. Plus, the added bits of flavor in D&D of their connection to crystals and tattoos makes the more fun and exotic.
Mechanically, I love almost everything about the system. I like the exotic skills, I like the special Psionic feats (well, I like a lot of them), I love the fact that they have power points instead of power slots, and I especially love the augmentation system. If spellcasters had spell points and augmentable spells, D&D would be a better game for it.
What I would like to see in any psionics revision is the complete or nigh-complete uncapping of powers. Tinker with the augments, change the scaling, whatever, but keep them increasing as high as a character is capable of pouring power points into them. This would not only make high-level psionic characters more effective, but would also make the transition into Epic play much much smoother, and perhaps even remove the need for an Epic Power system.
Along these same lines, I would like to see more options in each individual power, even if this means slightly fewer powers known. Dispel psionics, for example, should be able to mimic spells like Mordenkainen's disjunction (or at least simulate it to some extent). Detect psionics should augment to arcane sight and greater arcane sight levels of effectiveness. And so on. Furthermore, the possibility of developing custom augments to powers, similar to how spellcasters can research new spells, should be touched on (primarily to allow manifesters to mimic new spells from splatbooks).
Finally, please DO NOT fold Autohypnosis and the psionic focusing aspect of Concentration into Psicraft. Rather, I would much rather see them formed into a new Mental Discipline skill that would be a class skill not only for psionic characters, but also for contemplative classes like the Monk. I've wished we had such a skill in d20 since the original core books came out and I played my first game. Composure in WoTRPG was, sadly, the closest anyone ever came.