That same mentality considers an 883 Sportster as barely acceptable for street duty.
If Erik Buell can build a bike priced competitive with Honda or Kawasaki on the low end or a high spec bike 250cc performance bike, more power to him. It would be a great bike as he builds bikes that are fun to ride. I just don't see it happening. I'd have no problem being proved wrong. It happens all the time.
I agree, it would be great if Buell made a 250cc or so bike. Probably some Blast owners would consider it. The other positive would be to show N. American riders that you do NOT need 1100cc to have fun, and be able to actually go places.
Your comment on the 883, or skirtster as it is mockingly called, is very true. Part of the reason is because of how under powered it really is for its displacement. Lots of Harley guys think a 250cc bike must top out at about 50 mph and be completely useless for any state hwy, etc. Most would be amazed at the performance of either the Ninja 250 or new CBR 250. The fact these bikes can do 80-85 mph, lots don't believe.