The biggest knock against the Atari Arcade is its limited library. The peripheral is a one-trick pony for the Atari app, which costs $10 for 100 games, or 99 cents for any of several four-packs of related games. A total cost of $70 isn't outrageous for a complete retro package of Atari games and a controller to play them with, but it borders on the fetishistic. After all, you could always play these games on the iPad itself using touch controls.
This brings us to a final gripe: it's an odd fit to pair a joystick with Atari's arcade legacy. Many of Atari's most famous games, featured in this collection--Asteroids, Missile Command, Centipede, Crystal Castles, Breakout--used nontraditional controls like trackballs or paddles. A joystick just doesn't give you the real arcade experience for Centipede or, especially, Crystal Castles. Now, a trackball peripheral? Hmm, now we're talking.
Indie game developers--a precious few of them--have started making games compatible with the Ion iCade. They're hardly great, but they add to the value package. The Atari Arcade will need to add compatibility for other games to really be worth its price of admission. Space Invaders, Pac-Man, Dig-Dug...these are the games we need a joystick for, and none of them supports the Atari Arcade. Hopefully, they will. Retro game makers need to stick together.
Buy the Atari Arcade if you're an Atari obsessive, or if you're into quirky iPad novelties or fun retro gaming toys. Otherwise, you're not missing a whole lot. The Atari Arcade is a good idea, but it's not enough of what the iPad truly needs.