I agree with you, i dont like the idea of an Amiga in a joystick either. Especially as the hardware will be clones of the originals chips, that means it will be easy to hack the device and run any game you want on it.
I've been bought many of these new systems in a joystick including the commodore 64 one and they all feel.. well.. cheap to me.
My idea of a good use for this would be to incorperate it into the new Amiga's, i.e Sam etc, and idealy have the Catweasel incorperated too, creating a new system which also plays all your old disks (if they still work) and games.