At this point, I bet even hitting $400 would be great, cheaper than the competition, and could still yield a handsome profit if the parts ran $250-300.
I frankly just don't understand the weird form factor bit (or the right form factor and no marketplace, or some other bizarre combination of factors that are just "not quite right")
Spot on. The touchPad has the potential to come closest to this (no SD card but I think it's got a micro USB slot). If this was priced at, say, $349, or even better, $299 - wifi only - there'd be a small stampede. Make it developer friendly - easy to install custom apps on - this would be a massive hit. Sadly, this will likely never happen.