Yeah, this was a failed idea from the get go. Tablets in general are not well-received, and it all comes down to the form factor, as you said Bruno. Basically, as the guys on GDGT laid out:

If you have a tablet with a screen smaller than 5", then you might as well just get an iPod Touch.

If it has a screen larger than 10", it is completely unpocketable, and not pleasant to used standing around. So you're likely to use it sitting down somewhere, and the size is just unwieldy enough to where you'll just want to have that keyboard and mouse to do anything productive. So you might as well get a netbook for $250.

If it's in between, you're in this weird area where it's still not pocketable so you can't easily take it on the go, and it's not large enough to get anything real done so you wouldn't sit down at home with it if you have another computer in the home.

I don't want to count Apple out of a product category though. They tend to get into a market that hasn't seen many good products, and suddenly make a device that everyone wants (well, they've only really done it twice, but that's two more times than nearly any other company).

The only other products that I think can do something in this area are things like the mythical Courier. But even then, I can't imagine it doing any better than selling to a small niche of people who really love it.

Lastly, it's sort of funny that this functionally limited tablet couldn't make it to market even at $500, when Archos is releasing a fully-functional 9" tablet with Windows 7 on it. I don't think that device will do well at all either, but at least it looks poised to actually come to market. And if I'm looking at these two products, I think I'm more likely to spend another $50 and get the Archos.