I think its a great idea - as long as it supports usb (which I'm sure it does) if you need more storage, just pop a 16 GB flash drive in the side, or external hard drive, or connect to a NAS, etc., etc. There's even online storage available.
Seriously, there are a lot of folks who are not 'power users' and do things like install development environments or load up on songs (storing on the local hard drive isn't a good idea anyway), or tons of programs or documents that would need so much storage.
There are lots of folks who just surf the web and read their online email. This machine would be sufficient for that.