You are looking at the wrong market.
The features you talk about (local applications, copying files to the phone) are , mostly for "power users".
This is a basic phone, with capabilities to interact with the web/cloud/etc..
The people who will be looking to this phone are those that aren't able (or willing) to spend the 300 to 600 USD that a Nexus 4 costs in Brazil, and still need to check their e-mail or interact with services (banking, government, etc...).
Also, keep in mind that income in Brazil is much lower that what you may be used to, and for some this phone could be the first real interface to the web that a lot of people would be able to afford. I would guess, that for a lot of people, even the 60 USD that this phone costs on contract will be steep.
If you change Brazil for any number of nations that are developing their infra-structure but still need a cheaper mode of access to (the growing number of) services that are available online, you have a huge market ( India, Indonesia, Philipines, all of Africa, etc...).