I fail to understand who their target audience is.
Consoles are cheap because of the licensing of games for them, while the actual consoles are sold at a loss. This is not an attribute that the DISCover would likely share. Those that purchase consoles due to price, are unlikely to switch to the DISCover.
Consoles are somewhat upgrade proof (ie 3D cards, RAM, etc) to play the latest games during that generation's life cycle. It is highly unlikely that PC developers will hold back on new tech so they can target the DISCover as a lowest common denominator (bad idea anyway, eg was part of the death of the Amiga as a games machine), the DISCover is going to need to be upgraded or a new model purchased far more frequently than the current ~5 year cycle of each console generation. People who lack the know how or desire to upgrade their PC's to play the latest games aren't going to find much solace in the DISCover.
There is also the exclusive content for the various consoles... GTA 3 sold how many PS2's while it was exclusive to it?
Every reason people choose consoles over PC's, beyond the ease of use, is a feature the DISCover is likely to lack. (Speaking of ease of use, console controllers are far easier to use than many PC game interfaces.) Who do they think they're going to sell this to? Old people who want to play Solitaire/Mineclearer/etc and other $10 drugstore PD collections on their TV's?!?