The crazy thing is, even though you are right that these are low specs by modern standards, these are still basically laptop-level specs. Hell, it would beat a 2006 MacBook *Pro*:
The convergence between phones and computers is nigh. The Ubuntu Edge concept was ahead of its time, but soon enough smartphones will have enough computing power to fill 95% of people's needs. When that happens, who would want to buy a huge, noisy desktop box rather than just plug a screen+keyboard into the phone that you carry with you all the time anyway?
Same thing for laptops. How long will it take before the majority of "laptops" are actually empty shells into which you can just plug your phone?