I can understand developers would like this, since the android emulator in the SDK is slower than molasses in (northern) December.
I suppose ICS would not be an issue to get on this for the future.
But $200 seems a little steep since a real tablet can be purchased for that price range (although with perhaps with less CPU/RAM). $50-$100 would probably be the sweet point.
Actually this reminds me of something I thought of when Siri came out. How long is it going to take for someone to come out with a screenless / keypadless phone that is pure voice recognition (built into a headset like a BT headset??)? Same thing for GPS units (rather than being distracted by a map you just have to listen to the directions, much like having a person reading you directions "like in the old days"). That would extend battery life, reduce costs, although would also reduce it to the basic functionality (sorry no angry birds).