As someone said on the comments to the blog, it seems surprising that he didn't buy a N900 instead. It's far closer to being a full Linux machine than the Nexus One.
I understand what you mean by a "full linux" machine - but Linus, of all people, would see GNU/Linux as being what it really is: the kernel, and nothing more. The community has wrapped lots of things around it, but really, they aren't linux. I think it is good that him and people like him still realise that. Android makes a linux phone. Period.
Sometimes you want a phone and not a really bad small PC.
Apparently he didn't really want a phone: more a GPS!
I got one N900 and I don't see why it's a bad small PC, let alone a really bad one. Granted, most interesting tasks involve accessing a remote machine via ssh, but you can still toy with (for example) ipython, the shell and, in general, a good number of Debian packages. What is bad about it? (Pricing shouldn't qualify as part of the diagnosis.)