There is no obvious reason this product isn't going to sell in huge quantities. Less conceptually fragile, less expensive, more portable, same software stack, same media stack, same OS, same UX, same premium experience, same monstrous manufacturing and distribution reach, same monstrous advertising and product awareness engine. Every single one of the children you see in restaurants working an iPad so mommy and daddy…
I couldn't have said it better myself. I'd never use this product but I'm sure it will do great. I've been really critical of Apple lately, but I can't find any reason to get upset over this announcement. I find it funny how people are railing against this announcement just because its not useful to them. There are a million different needs and uses out there for different people.
I can answer my own question: Apple doesn't want people to share these devices: fewer sales.