I count myself with those who see Nookcolor as an unimpressive, crippled tablet, but arguments based on 'personal incredulity' are especially weak (though too often they carry the day). I have no access to marketing research data on this, and assume B&N did their homework. Mobileread-ers are a self-selecting sample, so while our opinions are no doubt the most informed ones available, we are not representative of the population of potential customers.
BTW
Pandigital Novel (also affiliated with B&N) is another of these things, with a lower res screen and less storage, and $50 cheaper. Would not be surprised if it comes out of the same factory in China.