The camera works just fine... I've used mine regularly for meetings via Google Hangouts since I picked it up a month after release.

As for storage, what exactly are you trying to store on the device? It really seems to only be intended for use as a dumb terminal to Google services, and in the current iteration I've yet to find a reason to use the local storage.

My biggest beef is the inability to locally cache music and video from Google Play. I think if this functionality existed, I would agree that the local storage is inadequate.