Well seeing as how there are only two decent Android tablets on the market (Transformer and Galaxy), I personally don't mind this one bit. Google gave the manufacturers a chance to create competitive tablets, and it just hasn't been happening (same could be said for the Android phones). The Android ecosystem is polluted with bad hardware combined with modified versions of Android that make Google look bad. Now Google has taken control and is releasing it's own hardware. Microsoft is doing the same. It seems like this is the only way to stay competitive with Apple.
The problem is with the pricing. As someone else mentioned, they wanted to take the fight to the Kindle Fire and hence started at $200. I get that.
However, I still think that Google could have taken control, and released it's own hardware (although the Nexus 7 is an Asus tablet first shown at CES ... mostly) with some profit($249 as the starting price) built into the equation, and still sold boatloads.
