And as a reference device it was very useful for establishing what a pure Android device would be like. I'm hoping that eventually the Android UX will evolve to the point where customers won't tolerate the service providers and manufacturers gumming it up with novel interfaces.
But the problem with the phone (in the US) is also that there were still two types to buy - 3g on att or 3g on t-mobile. Those that wanted a carrier-less phone were undoubtedly stymied by having to choose a carrier anyway, the exact opposite of what they were trying to do.