The $US199 Freescale Smartbook Tablet reference design was supposed to be the tablet design that OEMs could easily use to get a product to market fast and cheap. Maybe, but that doesn't mean it's very usable.
It has all the requisite hardware to be a powerful portable device:
7-inch touchscreen (resistive, unfortunately, to keep the design under $US200-you'd go up to $US250 if any OEM put a capacitive touchscreen on there), 512MB RAM, 4-64GB internal storage, removable microSD slot, an optional 3G modem, 802.11 b/g/n, Bluetooth 2.1, GPS, USB, audio ports, SIM card, speaker, microphone, 3-megapixel webcam, 1900 mAh battery, accelerometer and light sensor.
But the UI? No good. Freescale basically took a Linux build and shoved a couple apps - browser, doc viewer, gallery, media player - on top. They didn't optimise the interface for a tablet, which is evidenced by the fact that you kind of have to use a stylus to navigate. It's not like an iPhone or an Android where you can use your finger to swipe around a web page, you actually have to use the scrollbars like on a normal computer.
This is the main problem with the device. It's not customised in any meaningful way to make it a good finger-only experience. Just substituting a capacitive touchscreen for the resistive won't solve the problem; you'll have to completely redesign the OS in order to make the interface easy to use without having to pull out a stylus. A prime example is the onscreen keyboard: the keys are small and unresponsive, you need to manually activate and dismiss it to use. Even the JooJoo managed to get a gesture-based OS on their tablet.
There's nothing wrong with the performance of the device: you can run 720p video decently smooth, and web pages render at an acceptable rate. But until Freescale, or one of its OEMs, puts a better OS on there, it's basically a keyboardless computer. And the tablets of the early 2000s proved that those don't work.