Agreed. I played with a Nook Color a couple weeks ago and was impressed. If I could figure out a reason to add yet another piece of portable electronic junk to my collection (alongside a Nexus One, a Dell netbook dualbooting Linux or Mac OS X, a laptop, a Kindle, a DS, and probably other crud I can't remember now), it's what I'd buy. It's cheap enough to nearly be an impulse purchase, it seemed fast enough and powerful enough for what I'd want to use it for (though the netbook with a keyboard works better, since writing is mostly what I imagine I'd want to use it for), and it was cute and fun to play with.
So, yeah, there's already a low price point competitor to the iPad, though it's not being marketed as such. B&N may be making a mistake in not pushing it harder as a full-featured tablet...but maybe they know its limitations better than I do. At that price point, it almost certainly is similarly specced to a very low end Android phone, so probably can't actually run a lot of bigger apps effectively.