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I'd argue that the only reason it wasn't hugely successful was because it was running Android. Give it a real desktop OS -Windows or OS X- and I think people would have thought more of it. At its current iteration, it's like asking why linux isn't dominant in the workplace (over Windows)
I think that American customers would be more excited by a reasonably-priced non-mandatory data plan (i.e. pre-paid options) rather than higher quality hardware.