This echoes my thoughts, though I'd also add:

It's not got 3G. So what, my phone does wireless tethering.

It's not got a camera. So what, my phone has a camera (or two).

It's not got email (built in). So what, my phone has email.

It's not got GPS/Maps. So what, my phone has.

It's not got bluetooth/HDMI out/various Google integrations or whatever etc. You get the idea.

I've personally never been able to justify a tablet, when I already have an expensive phone and laptop. A cheap tablet for playing games, reading or surfing the web though, why not? All it needs to do is provide the bigger screen yet handheld form factor.

The only problem I see is the conflict between wanting it to have all my bookmarks and other settings etc. and wanting it to be a shared family device. Oh, and not being in the US. But I'm not really aware of anything stopping random generic brand from building one of these at a similar price point. The big boys will want to try and build an ecosystem and therefore avoid giving me what I want which is just a cheap, net-connected touchscreen.