The point being, they are charging 200 bucks for hardware that is superfluous and low end for an incomplete software experience that could be delivered without that on an app. The question is, are you going to give up your smartphone for this new device? Are you going to carry both? Probably not.
"It can do 10% of the shit your phone can do, only slower, on a smaller screen, with its own data connection, and inaccurately because you have to hope that our "AI" is sufficiently advanced to understand a command, take action on that command, and respond in a short amount of time. And that's not to even speak about the horrible privacy concerns or that it's a brick without connection!"
Everything about this project seems lackluster at best, other than maybe the aesthetic design from teenage engineering, but even then, their design work seems a bit repetitive. But that may be due to how the company is asking for the work. "We wanna be like Nothing and Playdate!!" "I gotchu fam!"
To address your point about e-readers, they have specific use cases. Long battery lives, large, efficient e-ink displays, and the convenience of having all your books, or a large subset, available to you offline! But when those things aren't a concern, yea, an app will do.
Like with most contemporary product launches, I simply find myself asking, "Who is this for?"