
To get the same output you note in your question, all that is needed is this:
PS1='${PS2c##*[$((PS2c=0))-9]}- > '
PS2='$((PS2c=PS2c+1)) > '
You need not contort. Those two lines will do it all in any shell that pretends to anything close to POSIX compatibility.
- > cat <<HD
1 >     line 1
2 >     line $((PS2c-1))
3 > HD
    line 1
    line 2
- > echo $PS2c
0
But I liked this. And I wanted to demonstrate the fundamentals of what makes this work a little better. So I edited this a little. I stuck it in /tmp for now but I think I'm going to keep it for myself, too. It's here:
cat /tmp/prompt
PROMPT SCRIPT:
ps1() { IFS=/
    set -- ${PWD%"${last=${PWD##/*/}}"}
    printf "${1+%c/}" "$@" 
    printf "$last > "
}
PS1='$(ps1)${PS2c##*[$((PS2c=0))-9]}'
PS2='$((PS2c=PS2c+1)) > '
Note: having recently learned of yash, I built it yesterday. For whatever reason it doesn't print the first byte of every argument with the %c string - though the docs were specific about wide-char extensions for that format and so it maybe related - but it does just fine with %.1s
That's the whole thing. There are two main things going on up there. And this is what it looks like:
/u/s/m/man3 > cat <<HERE
1 >     line 1
2 >     line 2
3 >     line $((PS2c-1))
4 > HERE
    line 1
    line 2
    line 3
/u/s/m/man3 >
PARSING $PWD
Every time $PS1 is evaluated it parses and prints $PWD to add to the prompt. But I don't like the whole $PWD crowding my screen, so I want just the first letter of every breadcrumb in the current path down to the current directory, which I'd like to see in full. Like this:
/h/mikeserv > cd /etc
/etc > cd /usr/share/man/man3
/u/s/m/man3 > cd /
/ > cd ~
/h/mikeserv > 
There are a few steps here:
IFS=/ 
<p>we're going to have to split the current <code>$PWD</code> and the most reliable way to do that is with <code>$IFS</code> split on <code>/</code>. No need to bother with it at all afterward - all splitting from here on out will be defined by the shell's positional parameter <code>$@</code> array in the next command like:</p>
<p><code>set -- ${PWD%"${last=${PWD##/*/}}"}</code> </p>
<p>So this one's a little tricky, but the main thing is that we're splitting <code>$PWD</code> on <code>/</code> symbols. I also use parameter expansion to assign to <code>$last</code> everything after any value occurring between the left-most and right-most <code>/</code> slash. In this way I know that if I'm just at <code>/</code> and have only one <code>/</code> then <code>$last</code> will still equal the whole <code>$PWD</code> and <code>$1</code> will be empty. This matters. I also strip <code>$last</code> from the tail end of <code>$PWD</code> before assigning it to <code>$@</code>.</p>
<p><code>printf "${1+%c/}" "$@"</code> </p>
<p>So here - as long as <code>${1+is set}</code> we <code>printf</code> the first <code>%c</code>haracter of each our shell's arguments - which we've just set to each directory in our current <code>$PWD</code> - less the top directory - split on <code>/</code>. So we're essentially just printing the first character of every directory in <code>$PWD</code> but the top one. It's important though to realize this only happens if <code>$1</code> gets set at all, which will not happen at root <code>/</code> or at one removed from <code>/</code> such as in <code>/etc</code>.</p>
<p><code>printf "$last > "</code></p>
<p><code>$last</code> is the variable I just assigned to our top directory. So now this is our top directory. It prints whether or not the last statement did. And it takes a neat little <code>></code> for good measure.</p>
BUT WHAT ABOUT THE INCREMENT?
And then there's the matter of the $PS2 conditional. I showed earlier how this can be done which you can still find below - this is fundamentally an issue of scope. But there's a little more to it unless you want to start doing a bunch of printf \backspaces and then trying to balance out their character count... ugh. So I do this:
PS1='$(ps1)${PS2c##*[$((PS2c=0))-9]}'
<p>Again, <code>${parameter##expansion}</code> saves the day. It's a little strange here though - we actually set the variable while we strip it of itself. We use its new value - set mid-strip - as the glob from which we strip. You see? We <code>##*</code>strip all from the head of our increment variable to the last character which can be anything from <code>[$((PS2c=0))-9]</code>. We're guaranteed in this way not to output the value, and yet we still assign it. It's pretty cool - I've never done that before. But POSIX also guarantees us that this is the most portable way this can be done. </p>
And it's thanks to POSIX-specified ${parameter} $((expansion)) that keeps these definitions in the current shell without requiring that we set them in a separate subshell, regardless of where we evaluate them. And this is why it works in dash and sh just as well as it does in bash and zsh. We use no shell/terminal dependent escapes and we let the variables test themselves. That's what makes portable code quick.
The rest is fairly simple - just increment our counter for every time $PS2 is evaluated until $PS1 once again resets it. Like this:
PS2='$((PS2c=PS2c+1)) > '
So now I can:
DASH DEMO
ENV=/tmp/prompt dash -i
/h/mikeserv > cd /etc
/etc > cd /usr/share/man/man3
/u/s/m/man3 > cat <<HERE
1 >     line 1
2 >     line 2
3 >     line $((PS2c-1))
4 > HERE
    line 1
    line 2
    line 3
/u/s/m/man3 > printf '\t%s\n' "$PS1" "$PS2" "$PS2c"
    $(ps1)${PS2c##*[$((PS2c=0))-9]}
    $((PS2c=PS2c+1)) >
    0
/u/s/m/man3 > cd ~
/h/mikeserv >
SH DEMO
It works the same in bash or sh:
ENV=/tmp/prompt sh -i
/h/mikeserv > cat <<HEREDOC
1 >     $( echo $PS2c )
2 >     $( echo $PS1 )
3 >     $( echo $PS2 )
4 > HEREDOC
    4
    $(ps1)${PS2c##*[$((PS2c=0))-9]}
    $((PS2c=PS2c+1)) >
/h/mikeserv > echo $PS2c ; cd /
0
/ > cd /usr/share
/u/share > cd ~
/h/mikeserv > exit
As I said above, the primary problem is that you need to consider where you do your computation. You don't get the state in the parent shell - so you don't compute there. You get the state in the subshell - so that's where you compute. But you do the definition in the parent shell.
ENV=/dev/fd/3 sh -i  3<<\PROMPT
    ps1() { printf '$((PS2c=0)) > ' ; }
    ps2() { printf '$((PS2c=PS2c+1)) > ' ; }
    PS1=$(ps1)
    PS2=$(ps2)
PROMPT
0 > cat <<MULTI_LINE
1 > $(echo this will be line 1)
2 > $(echo and this line 2)
3 > $(echo here is line 3)
4 > MULTI_LINE
this will be line 1
and this line 2
here is line 3
0 >
man 1 mktemp. – goldilocks Apr 15 '14 at 16:39