I think price is definitely an issue, but I also think the market target is confusing.
If it's supposed to be a performance machine, well, congratulations to Harley...they built a machine that finally accelerates on a par with late 1970s Japanese bikes.
If it's supposed to handle, well, they failed.
If it's supposed to appeal to Harley aficionados, well, they missed the mark there, too. We like heavy, low-rpm machines that look, sound, and feel like a 1936 EL. No kidding. That's what appeals to us.
I just don't think they defined who it is this machine should appeal to. They want it to be their answer to the Cadillac dilemma (a few years ago, the joke in that market was that the typical Cadillac buyer's next vehicle would be a pine box). The V-Rod is just not Harley-like, and the Harley riders I know just wouldn't ride one. It's too radical a change.
I think the Buell may represent a more intelligent market development effort than the V-Rod, but I don't see that many Buells out there, either.
My advice? What I would do? How about something like a 100-hp Sportster, that looks like a Sportster, with a stouter frame that handled well, for around $7K? That seems like something doable, and I think it would attract a younger market segment in droves. Another approach? How about a dual-sport Sportster? The R1150GS is BMW's best selling bike in North America...so there's a market there.
Nah, maybe they should just go back to Porsche, design a 1970s engine that would appeal only to German mechanical engineers, put it in a frame that handles just slightly better than Peter Fonda's Captain America bike, and just forget to paint the thing and leave it in the raw metal color....