Nexus 7 is an example of a strip down tablet where the essential has stayed while the lesser use feature has been taken away: the tablet has the latest quad-core chip running at 1.3Ghz, good IPS screen at 1280x800, and battery life. They take away the back camera, 3G connectivity, microSD, no USB (the microUSB slot should be for charging only).
Taking away those features, are partly to lower the cost, also partly to ensure current tablets from their partners still have a reason to exist in the market. But at this price, it really does change the market and force Amazon to include better hardware in Kindle and Apple to lower their prices and come out with a 7" equivalent. It will also put incredible pressure on the future Windows 8 tablet sales.