Everyone complaining about the price just doesn't understand what is going to happen and what ALWAYS happens (except for Apple).
Normally when a product is released that is "hyped" or highly sought after by even a small group of people, the price will be higher. This allows the company to make a little extra money off of the early adopters. A couple months later, they do a minor price drop, and then another price drop, and so on and so forth.
It works that way with just about everything, computers, cars, etc, etc, etc. Apple just doesn't normally follow this method, why else would my MacBook Pro 13" which has an old Core 2 Duo processor still cost $1000 or more? Every other company has drastically dropped the prices of their products that aren't using cutting edge technology. When Apple released the iPad, just about everyone (except for myself and a few others) complained that it was too expensive, but they just didn't realize what it takes to build these things. Now what Apple should have done is dropped the price by at least $100 on all iPad's now that it's a year old.
The Samsung Galaxy Tab did this, it sold fairly well for what it is, and even though it was selling decently well, they made their money off the early adopters, and then dropped the price so it would appeal to the mass market more. The same thing will happen with the Xoom and all of the other tablets (except the iPad), they will all drop their prices shortly after release. It's profiteering, and it sucks for early adopters, but we are willing to pay the extra to have it before everyone else.
Oh, and what Engadget didn't mention, is the scaling ability that Honeycomb has to run non-tablet specific apps. It does it AMAZINGLY well, it doesn't just put it in a little window like the iPad does, it actually scales everything up but maintains the quality. So while there may not be many tablet specific apps on the market now, you still have access to all of the other apps that are on them and they will be full screen and look great.