Not really. R$599 is indeed $259, which does make it more expensive than a Wii in the US. However, none of the big 3 cares about the Brazilian market enough to have a sensible pricing strategy; this is how much the other consoles cost in Submarino.com.br, which is our Amazon.com:
Wii - R$1999 - $869
Xbox 360 60 GB - R$2399 - $1039
PS3 40 GB - R$1799 - $779
And, to add insult to injury, a game like Gears of War 2 run up to R$200 - or $86. All that in a country with a GDP per capita less than one fifth of the US. It's easy to see why piracy is so widespread here - a console is a true investment, and you want to get the most out of it without spending huge sums for the games. And then the big 3 use the piracy levels to justify their lack of investments.
So the Zeebo is definitely a good idea for our market, with a good pricing point and (supposedly) piracy-proof. I really hope it succeeds, it could be an excellent step to convince the others that Brazilian gamers are willing to pay for non-pirated gaming - as long as both consoles and games are priced sensibly.