The biggest problem is that it's just simply too small.
I get that they wanted to have their cake and eat it too by having both a mini console you can play on your TV and also the console itself, but that just doesn't work when you have a screen and gamepad that freaking tiny. It should have been 5" at minimum, but ideally 7" @ 4:3 ratio. The screen itself also looks cheap and crappy.
I'm also still baffled by their decision to strip the original color palette of the Japanese cab for the international versions. Why make it look more bland? Also, no one except for Neo fans are going to recognize that cab format. The big red cabs are synonymous with the Neo here, and it would have been a much better idea to make it look like one. I doubt it would have been all that expensive to produce a different mold, especially since it would undoubtedly sell more based off of visual recognition alone.
If it were me, they should have made a proper full-sized bartop for the collectors and enthusiasts accurate to the Jap and US cab designs, and then also released a mini console based off of the AES or Neo-CD for TV play and mainstream consumption.
Also, I'm assuming there were licensing issues for non SNK games, hence the omission of classics like Puzzle Bubble and Magical Drop. Shame because Puzzle Bobble was/is arguably the most commonly seen game on MVS cabs then and now.