I see Vita TV more as a last attempt to get Vita foothold in the western market. Japanese are fine with their handhelds, but as we have seen, western market isn't so keen on dedicated handhelds anymore. $100 is a good price, and they could possibly even bundle Vita TV with the PS4. I remember there was rumors of a PS4/Vita bundle floating around a while back, maybe this is what it was talking about. Would make sense. Much cheaper to bundle with PS4 then a normal Vita is.
Also they had Andrew House come out and present it, he isn't part of their JP branch, so I really do think it was a device made for the western market.
I'm really happy Sony is willing to give the Vita another chance at life in the west, even if it isn't in traditional handheld form. Western gamers seem to much prefer playing on TV's if they are playing videogames on dedicated devices. Vita is a really cool platform with interesting games, would be a shame if it can't live on in the west.
It also completely undercuts the Wii u and Ouya. So this could possibly be an alternative for someone who is looking for a cheap game console who just wants to play digital games.