It will be interesting to see if passengers value nonstop service enough to choose 3 hours in an ERJ over a connection somewhere. Personally, I think it's a tossup--I don't particularly like wasting time on the ground in between connecting flights, but then again, I find the ERJ somewhat claustrophobic. Sure, it's better than a Jetstream or a Metro, but that's not saying a whole lot--it still feels like an awfully narrow tube to me!
I have to admit that if I were booking a flight to FPO tomorrow, I'd probably go for the nonstop rather than spend precious vacation time connecting at MIA, FLL, or wherever. However, if I were flying to PSP and had to change planes anyway, I would definitely try to avoid CO's marathon ERJ flight from IAH.
In any event, I hope they don't extend the idea to longer sectors, even if technology permits!