I think this is an interesting concept. Let's assume it is in fact a total fork of Android, in essence, a "Facebook Phone". I really think (as big as Facebook is) they will have a hard time with this. I'm not sure there is space for another type of device - even if it is a massive consumer brand.
I get the sense that a lot of people use Facebook for it's utility... but I think it has lost it's "cool factor" with the general public. I can't see a lot of people thinking "man - I really want deeper integration with Facebook!" Isn't the FB app good enough for most people?