I would honestly be shocked if they can ship a console with even those specs along with a controller and all the assorted bits and pieces you need, to an end user for $99 without eating some hidden costs themselves (which, if their budget is under a million, doesn't seem like something they're going to do). I'm not a manufacturing expert, so maybe I'm missing something enormous here, but given the history of console manufacturers taking a loss to sell bundled software, and the high list price of android devices, I don't see any evidence to support that their target price is remotely realistic.
Even worse, the hardware specs are just... short-sighted. 8GB of storage is not remotely enough for a console that has no physical storage medium for games - Microsoft gets away with selling a 4GB XBox 360 because customers can pop a DVD into the drive, but anyone who is actually downloading games off the internet is going to need way more space than 8GB. I've got individual games on my Android phone that are over a gigabyte, and that's ignoring the amount of space used by the android OS itself along with other data (like saved games) - many modern PC games have individual save files that are over 10 megs. That stuff adds up. If you force players to add/remove games from their system in order to fit into 8GB, they're going to spend a ton of time waiting on their internet connections (and you would expect a guy who worked on the OLPC to know that a lot of people out there don't have fast internet yet.) USB2 for external storage means that expansion options will be limited - loading game assets off USB2 would probably have pretty dire performance consequences.
There's also other assorted details that just make this feel lazy. The buttons on that controller mockup are only color-coded, which means it will be difficult (if not impossible) to clearly communicate to a color-blind player which button is associated with what action - even worse, they use all four colors, so it will probably affect people with every type of colorblindness. This is a mistake that none of the other console vendors have made: Microsoft, Sony, and Nintendo all made sure that each of their buttons has a distinct shape or letter associated with it so that in-game text and UI can communicate clearly to anyone who plays.
Furthermore, they show various games in their mockup material - like Minecraft, and Triple Town, and Shadowgun - but apparently they haven't made deals with all of these developers to show up in the promotional material (let alone use the platform), which makes it seem like they really believe they're just going to ride the Android Market all the way to success. Can they even provide access to the official Android Market without meeting the requirements that Google imposes for shipping the Google Experience apps or whatever they're called?
I could also rant about the fact that they think a Tegra 3 and Cortex A9 is adequate for a game console, but honestly I'm not worried about that. People have done amazing things with low-spec hardware before, but it certainly doesn't help if the hardware is poor along with the other poor decisions on display here.