I think hardware along these lines makes lots of sense, but we're perhaps not quite there yet in terms of hardware that can offer decent performance, battery life, and at a marketable price. However the entire industry is moving towards solving these problems, and given a few years, this kind of product might be far more feasible.
I'd probably only be interested if there was a hardware manufacturer with some kind of track record involved, and I'd wait a couple of iterations before jumping in.
I'd also probably install Windows on it, just to get access to the large pool of Windows only games.
When Valve unveiled the official name of "Steam Machines", rather than "Steam box" like everyone was calling them, I assumed it was at least in part because a handheld was somewhere on their roadmap.