I really can't see this taking off outside of a sect of hardcore audiophile Neil Young fans (they exist, check out the Steve Hoffman forums for evidence). I have no doubt that the player itself will sound spectacular. Ayre is no joke and I am positive that they will produce an A+ piece of hardware. My complaints are primarily with 1.) the bogus form factor and 2.) the lack of functionality of the device to do anything other than play music. I have a good set of headphones and love music as much (or possibly even more) than the next person, but there is nothing that I like better on a trip than listening to an album while reading the New York Times on my iPhone. Or taking a call on my iPhone without having to switch devices. Or writing an e-mail while listening to music. It's just too convenient and I am more than willing to sacrifice some sound quality for the privilege of not having to interrupt my listening enjoyment while doing other tasks.
Also, the elephant in the room is the absolute shit sound quality of the vast majority of new releases and the terrible remastering jobs of catalog albums. The 16/44.1 CD has more than enough resolution to handle anything that you can throw at it, but its capacity is wasted because of the need of seemingly every producer in the world to compress the living hell out of the music presented. It's absolutely terrible and is enough to drive me away from some great albums. The new Beck album, "Morning Phase," is case in point. Fantastic record, but really painful to listen to because of the high levels of compression applied even to acoustic guitar, voice, and orchestra; in other words, the three exact things that SHOULD NOT be compressed all to hell. I purchased the 24/96 HD Tracks version and it was money thrown down the drain. I should have saved a few dollars and downloaded the mp3 from iTunes; I am positive that it would have the exact same sound quality for a lower price.
Unless the Powers that Be are ready to confront the issue of shit mastering and take steps to inform the listener of the lineage of the albums that they sell, they will even lose the audiophile audience. Pono has no chance outside of this niche market, and there are several competing units even among this demographic at this point. Then again, if Dr. Dre and company can sell the public $300 headphones that sound like ass, anything can happen, I suppose. Which incidentally, is another reason why Pono can fail. People plugging their godawful Beats headphones into the high-quality Pono device will assume that Pono sounds like crap when it is really their listening device doing the damage.