Interesting idea.
Though the 8GB Nexus 7 is about 160-180 used, the PI may be cheaper, but it could be argued that the Nexus 7 would be more powerful.
It would be interesting to see if a Nexus 7 would work in that way. It would make it very useful. Though I would like to see if you could run multiple USB Rigs on a single Nexus 7.
Interesting idea, but I would still like to get the PI working as intended and see how it works for this purpose.