Reading between the lines
Given the many really obvious reasons why this is a really dumb idea (no app store, the need for hardware manufacturers to buy in, the 800lb gorillas of android and IOS, the patent minefield of the mobile sector etc), I can see two possibilities
1) Shuttleworth has decided he doesn't like being rich and is looking to go down in a blaze glory
2) Theres more to this then they've announced.
Its pretty clear that some hardware manufactures are worried by the level of control Google has over their software sack, plus the purchase of one of their major competitors (Motorola), that everybody and their dog produce almost identical android phones, and they need a way of differentiating themselves from the android masses. So I'm guessing that Cannonical have someone like Samsung on board already. Or possibly Samsung have Cannonical on board.
Cannonical have been doing custom engineering for hardware companies for years so It wouldn't surprise me at all to find the roots of this are Samsung approaching Cannonical about producing an android rival.
It would explain why they seem so confident in the 2014 date for hardware, and why such a small company with no reputation amongst the all important carriers, and no budget to buy into the market feels able to take on the near limitless resources, "household name" status', and industry connections of google/apple/microsoft/RIM.