This isn't really that low end ... this thing would be like 20x more powerful than the Vita and cheap by tablet standards. There's never really been a device like this.
For a console it is extremely low end. Hence it should be priced as a portable, not a console.
We don't really know the specs yet so lets not jump the gun there either.
The Tegra X2/Parker chip reportedly is a full 4 TFLOPS, obviously Nintendo probably won't use that but they certainly could use a configuration like
1-1.5 TFLOP (when plugged in/docked)
400-450 GFLOP when unplugged from wall socket/portable power.
The "dock" could basically just be a cooling/fan unit which actively cools the chip when its running full tilt. When the system is undocked it could run strictly in "portable mode" (passively cooled). That would make a lot of sense actually.