I was hoping for a Raspberry-Pi level computer paired with a reasonable amplifier and a reasonable DAC; certainly not competing with top-end discrete components, but well-designed (e.g. to reduce any electrical interference) so that the mass market could get reasonable quality audio.
I think the failing of the Q is that the price point ended up in the middle ($300 without speakers), and that the initial functionality was way too limited. I'd hope you could make something with the functionality of the Google TV with a reasonable amp for around $100 - $150 retail (without speakers). I hope someone tries making a device like that, without the Q's quirks (e.g. spherical touch-sensitive box & locked down functionality).
My guess is that the sound quality is good, but not excellent. Better than computer speakers, better than the cheapest bundled units, nowhere near good enough for audiophiles. But that is only a guess based on what should be achievable.
With the limited functionality, it's just too much effort to order banana cables / connectors. I was hoping Google would announce it was now "unlocked" and they were supporting running more apps (the hardware & software are fully capable of running general Android apps with the Android SDK tools, but there's no easy way to interact with the apps). It looks like that's not going to happen now.
e: really, is downvoting appropriate here? I can quite easily speculate that i don't think the nexus Q sounds that great (and thats what i'd put my money on), but the electronics exist, and cheap enough, to allow it to potentially sound fantastic. I was hoping someone might have some first hand experience to get better than speculation.
At the end of that, I can't really imagine too many people willing to pay all that money for a box which they still have to go and buy a pair of passive speakers for - particularly because the people in the market for passive stereo speakers wouldn't event glance sideways at the nexus q as a serious amp choice.