1) Developers will probably not make any money on games for it. Its a problem for Android too. Many good iOS games will never be ported over to Android because of this. And some developers have left Android after products didn't make any money. Its a culture problem, plus pirates made it a terrible market to make money
2) Open system easy to hack, its going to rub FPS multi-player games useless. Its already killing the PC gaming of that type.
3) Licenses and patents, and honestly I can't see those specs being sold at that $99 price tag period.
4) Lack of marketing ability to attract the players to make the market large enough to attract developers
5) The few open source titles that are decent games are so late 1990's quality in graphics. Though graphics are very highly over rated, game play is much more important and there just isn't that many with great game play.
6) Intense pressure from Sony, Microsoft and Nintendo will knock it down in lawsuits if it ever did gain traction. Or just out right buy the company to kill it.
7) As mobile phones continue to push the envelope in performance, the few good games it might be able to offer will evolve around those more powerful phones and will probably leave that thing in the dust with ability to play games a year or 2 down the road. Mobile gaming ability and phone power is increasing exponentially, unlike the slow pace of desktops which had that kind of growth a decade ago.
8) When they do start having to make good money to solve these problems, to cover costs of the machine, litigation's, patients, paying developers to make games worthy enough to attract paying customers, the very people it cater to that nitch Linux Open blah blah group will turn away from it.<p>This is why desktop gaming has always been the domain of Windows PC's, and for mobile its the domain of iOS and for portable its still a nice race between Sony and Nintendo, both of which is hurting over iOS gaming.