We're busily remodeling our basement arcade room to be a classic console room, so we were already on the hunt for a good original 2600 and original cartridges. But I bought this too, just because it costs less than a single DS game, and the plug and play flexibility means we can use it upstairs (I don't think it's technically allowed in the classic console room). Also, the kids can beat on this one and I won't care. They LOVE classic games!
It does NOT replace a real 2600 in my opinion, but is backwards-compatible with original 2600 joysticks, which I think is pretty cool, if unnecessary.
The part I don't really understand is, why is the predecessor, the Flashback 2, going for $200 on amazon? Just because it was a limited release? It seems to come with the same games this one has (of which, by the way, only half are actual original 2600 games, the other half are "new" Atari games). /shrug