Well, it certainly does take up a lot less space than a NES and Super NES combined. And I think the advantage for most people is that they either don't have a NES and/or a SNES, or the NES they have is virtually worthless because the connectors are so bad. If this will play NES games without having to blow in them and readjust them fifty times while repeatedly pressing the reset button, it presents a pretty good value, especially considering it's really incredibly low price.
As to functionality, there may be some tradeoffs. Maybe it doesn't support NES light gun games, but if it supports actually working, instead of just blinking on/off, then maybe it does something a little better than the original NES.