The reality was that console makers were not bloated -- they were already selling at cost and the Ouya was just another console and a bad one. The games library wasn't compelling and new top Android games were already incompatible with the underwhelming Tegra 3. Performance on the whole was bad, PS2 quality. It was certainly cheap at $100 but with the hands down superior Wii at $150 (and probably somewhere behind most users tvs) it just wasn't cheap enough.
On top of all this is was marketed exclusively as a console when it should have been going after people buying the Apple TV.
The potential is still there though and maybe Ouya has enough cash to regroup and be the company to deliver a compelling product. This news doesn't exactly bode well on that front though.
Openness was a major point in favor, which the Wii doesn't have. It doesn't look like anyone is taking advantage of it though.
Many of such mobiles do have HDMI connections and bluetooth gamepads available.
Then there are lots of cheap USB pens running Android that you can just plug into your TV.
So there isn't much a Ouya can offer against these options.
Average Joe/Jane don't care about it as they already have the phone anyway.
> Do the cheap USB pens have comparable graphics, USB expandability, and look as good as the Ouya? :)
Quite a few to choose from, both cheaper and more expensive than the Ouya:
http://www.conrad.de/ce/de/overview/0413084/Android-Mini-PCs
Maybe their GPUs aren't at Ouya's level, but they are good enough for most Play Store titles.
And the rest is an interesting study in how hard it is to jumpstart an ecosystem, especially after casual games have been driven to a price point that requires a user base two orders of magnitude bigger to have a chance.