Do you have young children, and have you ever spent more than 2 hours in a minivan with them? Law requires me to be in the driver's seat, kids in the back seat. Kinda hard to entertain small children that way.
I agree that there may be other more worthwile forms of entertainment (books and travel games), which I have, but even those fade in time. A headrest monitor with DVD/whatever else capability is another tool in the box to keep your journey sane.
Now, as for the iPadd "killing" this, really??? I've seen dual monitor DVD kits for under $200, not sure how a $500 piece of hardware "kills" that. Shoot, I paid $400 for a laptop that often gets used a a backseat entertainment system, and has a lot more functionality than this Apple contraption.
* iPadd is a reflection of the fact that Apple has finally built a Star Trek TNG padd-like device that can actually be used as such for managing server farms. For this I give them credit.