You let your mom buy an AIO with an E-series APU? Bad son!
My specific advice was to buy a refurb Core 2 PC from TigerDirect for around half the price, but she shied away from something that was used and may have suffered equipment failure in the past. What she wound up doing was her own decision. The unit she got is decent enough, and she won't care about the deficiency of the E1 inside it 5-10 years from now when she finally replaces it, if it lasts that long, which it probably will. Seriously, she was content with her old Netburst Celeron. The only reason she replaced that was the Windows XP deadline.
Seriously though, why not an AIO with at least an IB Pentium, or 1007U / 1037U? If you're going to spend the money to upgrade, and she holds on to her machines that long, don't you think that if the CPU is marginally faster than what she had before, then in five years time, it will be REALLY slow, in comparison to current rigs five years from now. Why put her intentionally behind the 8-ball, so to speak?
For her usage patterns, the CPU was rarely the bottleneck on her system. The worst thing about her old machine was the tiny amount of RAM (and all the swapping it had to do to compensate). It was terrible. Given the modern shift towards mobile computing, RAM requirements for "light" computing may not go up as quickly as they did in the 90s/early aughts, so 4 gigs should hold her longer than did the 512mb on her old machine. Furthermore, good luck finding something other than an E-series chip within the price range acceptable to her. I'm surprised she spent as much as she did. Sadly, she could have gotten a faster E-series chip in a Lenovo unit that was sold out at the Office Depot where she decided to buy (why, I don't know, but that's another story).
Listen to yourself, seemingly defending this practice. It's like selling watered-down milk.
Whether or not I like it is irrelevant. Put yourself in the shoes of the OEM, and look at the average non-enthusiast buyer who is not a power user. Then you can begin to understand why they would pay an estimated extra $30 to use this CPU over something that might have more computing power. Unlike selling watered-down milk, at least the informed consumer can look up the J2900 and see it for what it really is. Can you detect extra water in an opaque, sealed milk container? I can't.
No, but market forces should ensure that. That is, if we had a healthy, demand-based market.
Demand for what? The desktop market is taking a nosedive, due in large part to the fact that many people already have a "good enough" desktop or that they are moving to laptops and/or tablets. Anyone buying a new desktop is either going to be a power user that needs more than what can be had in a mobile package plus more than what could be had from a top-end PC 2-4 years ago or some fuddy-duddy that can't be bothered with mobility in their computing.
When it comes to sub-$500 machines, the power user is immediately off the list of potential buyers. What remains are an odd hodgepodge of people who aren't buying iPads or laptops but need to replace a desktop (I suspect there are very few new entrants to the market) and don't want to buy used/refurb. On the x86 desktop front, desktop "bloat" slowed down after the Vista fiasco, which was a major shot across the bow of Microsoft showing that they can't just assume that all users will keep upgrading hardware to keep up with the processor/memory/video card demands of an operating system, much less its supported applications (and I'm sure other software vendors took heed of this). Certain computing paradigms continue to require stronger and stronger hardware at the pace of Moore's Law (gaming, HPC, etc), but general use just isn't becoming that much more demanding. The Flash-bloated nonsense you see on a lot of web pages is about as bad as it was in, say, 2006-2008. If your machine can handle that, it can handle just about any light computing task. And, let's be honest, grandma isn't watching hi-res embedded video; she's watching it in low-bandwidth mode, if at all.
How is the market not demand-based? It's not like the salespeople at Best Buy or Micro Center want people to buy the E1s. They're doing their best to upsell to the core series, and talk down Celerons and E-series.
The motives of retail clerks and OEMs are not always the one and the same. Retailers are ultimately responsible for carrying an inventory to at least attract, if not cater to, the customers they want in their stores. Commission-based retail sales clerks are always going to want to sell the highest-dollar item available. The store still has to fill out various price points to get warm bodies in the store, and if that's what the OEMs are shoveling up, then . . .
Bottom line is that many of us seem to think that end-users buying cheap OEM machines really care that yesterday's mid-range should be today's low-end, just because of Moore's Law and basic economic theory. They don't, and OEMs certainly don't. This is why you see mobile chips showing up in cheapie desktops/AiOs. Margins improve for the OEM, and the end user gets something that is good enough for them. Many of them also don't care about SSDs vs 5400 rpm platter drives. OEMs aren't going to make any extra money by having the fastest, lowest-margin machine at the $400 price point, especially since desktops aren't a "trend" item anyway.