This is a very good idea executed poorly. SMS has become a way of life and you'll be receiving messages that you can not read, also a paper phonebook requires that you carry a pen with you. Play it again, John, this time with a pager sized (text) display and I'll buy one. edit: added the (text), it does have a display but can't display text messages.
Strikes me to have two major markets: (1) people who only want to talk to people via phones (e.g. some of the elderly) and (2) as a fashionable item. The gold one would be a head-turner and topic of conversation.
Some people want to get rid of SMS from their way of life (or never adopted it in the first place), and hark back for simpler times. This phone appeals to that.