Ive been following the OpenPandora development since the Gamepark GP2X era and yes the Pandora is pricy but the journey have been long for the devs and Everything from design to production has been payed from their own pockets by talking loans at banks.
When the OpenPandora Project started there where NOTHING on the market that could do what the Pandora would do, A handheld system with full QWERTY keyboard and dedicated gamepad Controls and touchscreen for all retro gaming needs. It was a Dream come true when announced but the sad part is that development took about 1-2 years to long time so when released it was not as top notch harware as it was supposed to be, but there are some great coders porting/coding for it so it has a quite decent repo.
The cost of doing things like this in europe in small scale is high that's why the price is so high.
I have lots of love for the pandora Community/devs/creators so my input would be to colored by my feelings for the OpenPandora.
This Project was made for a Community that love Retro gaming not the masses, look around the Amiga World it's not like small scale hardware wether it is for classics or NG boards are cheep.
So it's a niche Product made for retro lovers who love to code and play retro games.
The OpenPandora was early with MANY emulator ports for handheld also if you check the repo they got pretty much emulators for all systems out there Worth mentioning from TI99, Atari, Amiga to new stuff like N64/PSX/Dreamcast and even newer like PSP, Nintendo DS etc... all that in your pocket and also a computer in your pocket with desktop Linux experiance was something Amazing when the Project started.
I love it and I Think it's Worth every single dollar but that's because I love what it is and was there from start.
To know more about all bumps and problems doing this machine read the old blogs from start to finnish, it was a logn ahrd road. The OpenPandora is no chinease cheap crap without love and thought put into it.
Gamepark took Another route after making the quite good GP2X (it had faults but I liked it) and did the GP2X Wiz and from the GP2X lovers who wanted Another route came the OpenPandora.
Edit: Read the wiki about it to learn some more, also @unknown1 - they started the development long Before ipads, no ipads to use then...
Also for the phones/pads as you mentioned would be cheeper, they did that to... Made by the OpenPandora people "icontrolpad 1 and 2":
as said the openpandora is not for everyone just as the X1000 aint for everyone and loads of people think that is to expensive...