Good decision. There's nothing wrong with not releasing something you don't feel is up to par. I actually admire that. Ship it when it's ready, and not a moment sooner.
On the other hand, there is something wrong with releasing a product that turns out to be over-priced and under-featured. That worked for Google in the past where it was all Web products, the price was "free", you could just slap a "beta" label on it and iterate daily. But that doesn't work when something costs $300 dollars in a competitive marketplace with established leaders.