Shelves full of $199 Netpliance I-Openers sat around at the local C-USA stores until they all got shipped off to who knows where... If hackers were responsible for Netpliance's demise, THEY weren't buying them either.
It's possible the computer market is saturated and well... Internet appliances have the "duck thing" going against them. (If it looks like a duck, smells like a duck, quacks like a duck - it is a duck.) Internet appliances don't look like Internet appliances, they look like stripped down computers.
Or, it's also possible the Internet is not the end-all be-all that us "geeks" make it out to be... For a sobering fact, realize that with all the piracy on Napster - album sales are actually higher than previous years. I'll bet one major target market of Internet appliances (the elderly) long for the days long past when you could actually pick up the phone and speak with *gasp* an ACTUAL PERSON! To people who have avoided buying computers, the Internet is an intimidating, impersonal, disorganized realm of chaos. No Internet appliance design can change that.