Yeah, it might be a bit cheaper, but the lower specs don't make it worth it. What manufacturers need is basically a kindle fire specs, with front facing camera for skype (low qual is fine), a memory card slot, and full blown ICS. Price it at $250 because of the added camera and mem slot, and you will beat down the kindle fire in a heartbeat!
It sounds like the upcoming Transformer Prime 7" might give us just that (and with quad core to boot)... but I don't think that is due out till Q2 or later? Correct me if I'm wrong there.
Also, to the person commenting on all of these devices not coming out until after Christmas - of COURSE they didn't come out till after Christmas. They want to get as many people to buy the full price stuff they are trying to unload before releasing new and cheaper products. My friend wanted to buy her mom a mid-grade tablet for skyping. I told her that really she should wait till February, but she ended up getting the Galaxy 9.8 tab. I think it's a great choice for her - but she probably could have paid much less in the next couple months for the same specs because of all the new stuff coming out. These companies aren't stupid, they know how to get their money out of old products. People will buy it just because it's christmas and they don't want to wait.