Two biggest limitations are RAM and wireless interfaces, or rather lack thereof. This thing has less RAM than my router (admittedly a $70 box), and has neither WiFi nor BT. It does not seem to have many GPIO pins, too.
With the amount of RAM installed, it's mostly a handheld terminal, and maybe a handheld console with emulators for old games.
While this is admirable as a proof of concept, I suspect that moving the price point up to, say, $30 could give a much more useful and hacker-friendly device.
I greatly appreciate the split keyboard and the replaceable NiMH batteries, though.