Frankly, we've been spoiled by Apple's portable designs. After essentially inventing the modern notebook computer form factor Apple has been churning out better and better portable machines, to the point that Mac portables now significantly outsell the desktops, and for many people their only computer is a PowerBook or MacBook (Pro). We've been led to expect a Mac portable to be the only computer you need (so much so that now the phrase "desktop replacement" almost seems quaint). It's in that light, I think, that the Air seems to fail. Whatever else you might say about the machine, it is not really adequate as your one and only Mac if you're anything like the majority of tech-savvy TUAW readers.
So what is the Air? I think the Air is, and is really intended to be, a secondary computer. It's serious enough to get real work done on while you're away from home or office, but it's not a primary production machine in my view. Looked at in this light, however, the sacrifices Apple has made don't seem so bad. If you've ever lugged a 5-6 lbs laptop (plus accessories!) on your back all day, you know exactly what I mean.
What's the upshot? Well, if you're only going to have one Mac, it shouldn't be the Air. By the same token, it seems to me too highly priced right now to be a huge success. Its real market is going to be executives and others who have enough disposable income (or expense accounts) to have an Air plus another Mac. Thus, I think Apple should embrace this "second Mac" status more explicitly by introducing some kind of syncing system similar to the iPhone/iPod. It would be great if there were a kind of MacBook Air dock you could set it in and have it automatically sync, say, your Documents folder as well as parts of your iTunes and iPhoto libraries, etc. well beyond what third party software can offer in ease of use. Even more radical would be a kind of workspace syncing, so that you could grab your Air and it would automatically have basically the same workspace you were using on your main Mac, with applications, documents, etc.
Of course, only the future will tell if the Air is too big of a compromise (like the Cube) or whether it will meet with some success. I'm sure Apple will sell plenty of Airs, but I seriously doubt it will have the success of the regular MacBook lines. Nonetheless, it shows that once again Apple is out in front and (in some respects) listening to its customers (who have been clamoring for a small Mac portable since the 12" PowerBook died). It may turn out, like in the case of the original iPod, that Apple is really creating a new market here that we just don't quite understand yet. But if that's so, much like the original iPod, I think the Air will need to drop in price and expand in functionality to really be a mainstream hit. What do you think?