Well when the G1 was released it was good hardware so the same can be said.
It was average hardware, not good. It had a slower processor than the already existing Iphone. It was a middle of the road hardware phone with a new, hyped OS. That's why it did well.
The problem with that phone though is the build quality was chincy (as is the Mytouch) and the processor/ram cannot handle all the widgets/screens/customization that the phone's OS can do.
So essentially you have this awesome platform that you can't take advantage of. Whereas on the Nexus, you have top of the line hardware (compared to anything out right now) and now you can finally do on that OS what you wanted to do on the G1 but did not have the power to do.
Not to mention, the touch screen is about a billion times better, which is a HUGE difference, IMO.