Having done a lot of messing with the PE for the last two weeks I have found several flaws that probably contributed to the early demise of the PE and probably the biggun, too.
1) lack of app support- though the apps in the entourage store were OK, they weren't what people were used to on their Android phones. Lack of access to the Google apps market was a big problem. I suspect the reason that Google didn't let Entourage get in there (assuming it was Google's decision) was because many apps would not have worked due to the differences in the Entourage hardware. Nonworking apps might be blamed on the apps, not the hardware, so to prevent such confusion, don't let the "offending" hardware access the app market. I have found a few ways to get around this limitation, but it requires far more messing around than most people are willing to do. I am a geek and I am not sure I want to mess around that much considering the alternatives that are available.
2) OS not fully developed- Android 1.6 was too far behind and Android 2.2 beta still has too many kinks. My device frequently thinks it is connected to USB even after disconnecting it. It won't hibernate unless I use the power switch to force it. These little annoyances add up to a less than stellar user experience.
3) The documentation is really weak. The user guide tells you how to connect to a computer via USB but not what to do after you have connected. It looks like the Library app allows you to add to the device's library, but there is no apparent way to remove stuff from the library if you don't want it on the device any longer. There is nothing in the user guide (that I have been able to find) that tells you where to put files that you will want added to the library or how to remove them from the library once you have. Playing with the library app doesn't yield any clues either- removing items from the library seems to have been forgotten in the programming.
4) The response to pen input on the e-ink screen is just a little too slow. It captures all hand written/drawn stuff just fine, but the display responds too slowly- It gives you the impression that the thing is running a old, memory starved processor even though the Android side is very snappy. The ruler and shape recognition modes are fantastic, but just a little too slow to be useful. The annotation features are useful for the education crowd but for everyone else, not so much.
5) The mechanical design is great but the device is just a little too thick and heavy. It looks nice and has a tremendous amount of functionality but once you pick it up it feels like you're lugging a laptop.

These are the main issues I have found. There are a ton of things that make it a great device, but unfortunately you really have to be a geek to get the most out of this thing.