I'm afraid that the shock value of "Just barely twice the power of the GameCube" might be too much for alot of people and they get turned off.
Hopefully, if it is a $99 price, that will equal things out.
But, assuming those things cancel each other out, I think it comes down to the games. Specifically early on.
This won't be a "comeback" system. It has to hit the ground running. When the prices start to drop on the 360 a year or two from now, if Nin doesn't have a foot hold by then, they never will
and this basically cripples cross party titles.