PS: Hate on me what you will GAF, but outside of the OMFG awesome off contract price this round of the Nexus phone has been rather disaappointing across the board.
Not at all. I was skeptical of the N4 almost from the moment it was rumored to have only an 8 GB version. Later we found out there was also a 16 GB version, LOL.
It's clear that Nexus isn't supposed to be a 'mainstream' smartphone just from the decisions that Google has made with it. The N4 really is Galaxy Nexus II, same problems same limitations but now it's LG instead of Samsung. I don't think there's anybody left who will argue that Google isn't purposely crippling the devices so they won't be competing with their own OEMs, who sell much more expensive phones at a profit.
The N4 is basically a great phone for your parents; non hardcore smartphone users; prepaid users.
At it's core, it's a phone for developers. When you're developing an app, you aren't taking the phone everywhere, you're at your computer. The battery life reflects this. A developer doesn't need a ton of storage, just enough to hold the OS and the stuff they need for testing the app and the app itself. Nor does he need to run the phone full-tilt for hours at a time playing a game, he builds his app on his computer anyways and only uses the phone for testing so overheating is entirely irrelevant. When you think about it, the N4 is absolutely the perfect developer phone, which is what Nexus was always about in the first place.
Your parents would hate a stock Android device, they just want to pull the phone out of the box and use it. A phone with an OEM skin like TouchWiz or Sense is much better for that because of all the extra features and functionality added to the device. You have to buy and install a ton of extra apps to only partially replicate the functionality that comes out of the box on my Note II, for example. Stuff like S-Pen and Multi-Window can't be replicated period. And then the apps all work and look different from each other. This is why the ideal smartphone for your parents is an iPhone 5, not an Android device, because everything looks and works the same and Apple enforces their app design guidelines with an iron fist.