There is a video from gamester81 on youtube that shows some gameplay. I am definitely intrigued by it.
Just watched it ... so once again, you've got a developer with a financial interest (he's doing the pack-in game) creating a promo/sales video.
Still no real details, but the graphics on Tiny Knight looked approximately like what he said ... SNES-ish. Not actually great quality SNES, maybe more Amiga (they even included Amiga-style tracker music).
I'm going to channel Arkhan here, and say that Tiny Knight itself looked like a low-quality game-school-project Western wannabe copy of a Japanese game.
In the meantime, there are a bunch of responses from people that want 32-bit games, and others that want online capability, and others that want HDMI output, etc. So it's a very divided set of potential customers. Sure, with a high enough spec, you can please them all ... but then what's "retro" about it? At that point you've just got a modern console doing simple low-resolution games. Ouya or PlayStation TV anyone?
I still don't get it ... but it will probably get funded by the clueless-masses, they'll release it (it will be a Raspberry-Pi-clone in a jag-wire case), and then there will be half-a-dozen crappy games before the whole thing collapses.