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My reaction: why the fuck would anyone who's not insane pay $150-$200 for a device capable of only playing games like Game Dev Tycoon, GTA San Andreas, Lara Croft GO en Halo: Spartan Assault (those are some of the more noteworthy games I could find in the Windows Game Store).
A digital only console at a lower price (at the very least $100 cheaper) would be good for people who only buy digital, but then Microsoft would have to be willing to take the upfront loss on a console sale and they'd have to make sure that they'd get back those losses via digital royalties.