The problems are:
1. He said it was 100% open source ("The anonabox is an open source embedded networking device designed specifically to run Tor. It's 100% Open Source." on the project's page), and that he was designing the hardware (see the generation 1, 2, etc pics), clearly implying he was developing the hardware.
He clearly lied about that. Is there a problem with a customized small Linux distro running on an existing chinese router? No, there isn't, if you don't lie about it.
2. A quick review proved the software to contain significant security flaws, which makes this guy unsuitable for developing something where security is critical.
I see no problem with buying an off the shelf router with custom firmware from somebody who isn't balantly lying about what I'm paying for, and who actually understands security. This guy isn't either of those things.