Playing Atari games on the Arcade is generally fun, but the appeal can be limiting. A slightly stiff micro-switch joystick and large, mushy buttons don't click as comfortably as the iCade's more professional hardware. You can feel the difference when button-mashing through Asteroids or Yar's Revenge. The hard turns on the joystick are also difficult to pull off without the Atari Arcade shifting a little on the table: make sure those rubber feet beneath are set firmly down on a grippy surface.
The biggest knock against the Atari Arcade is its limited library. The peripheral is a one-trick pony for the Atari app, which costs $10 for 100 games, or 99 cents for any of several four-packs of related games. A total cost of $70 isn't outrageous for a complete retro package of Atari games and a controller to play them with, but it borders on the fetishistic. After all, you could always play these games on the iPad itself using touch controls.
This brings us to a final gripe: it's an odd fit to pair a joystick with Atari's arcade legacy. Many of Atari's most famous games, featured in this collection--Asteroids, Missile Command, Centipede, Crystal Castles, Breakout--used nontraditional controls like trackballs or paddles. A joystick just doesn't give you the real arcade experience for Centipede or, especially, Crystal Castles. Now, a trackball peripheral? Hmm, now we're talking.
Indie game developers--a precious few of them--have started making games compatible with the Ion iCade. They're hardly great, but they add to the value package. The Atari Arcade will need to add compatibility for other games to really be worth its price of admission. Space Invaders, Pac-Man, Dig-Dug...these are the games we need a joystick for, and none of them supports the Atari Arcade. Hopefully, they will. Retro game makers need to stick together.