The cause for this issue may be the following:
1. Presence of Pull Up resistors on I2C lines. Refer to webpage: http://www.cypress.com/?id=4&rID=37644 to know more.
2. Make sure the VTARG pin is connected to VDD of PSoC. The MiniProg3 always checks that there is the correct voltage there, whether it is powered from the MiniProg or from the board.