But anyway, back to the OP:
My basic issue with Psionics is that it's a fifth wheel. Pretty much everything that psionic characters can do, magic-using characters can do anyway. Psionics does add an interesting set of new mechanics, but too many of the psionic powers are just PHB spells with the serial numbers filed off and some vague fluff about ectoplasm.
The next problem if you're replacing magic with psionics is that loads and loads of the basic material of D&D assumes magic. For instance, about half the creatures in the various Monster Manuals have spell-like-abilities or powers that directly duplicate magic of some kind, and every single magic item in the DMG and most of the items in the Magic Item Compendium use spells for their effects, creation, or mechanics.
Sure, you can rewrite half of D&D to be psionics-based rather than magic-based, but it simply isn't worth the effort, IMO. The basic assumption of pretty much all the published D&D books is that magic is the base system and psionics is an unusual alternative. There are a few campaign settings and adventures out there where the opposite is true, but they're specifically designed to be different.
So it's not that you can't replace magic with psionics, it's just that I don't really think it's worth it.