I think so. It still means less tinkering with the car itself, which means more people would be willing to use it.
I know I have plenty of friends who would have no trouble hooking up an OBD-II connector, but if I showed them hooking up to the ECU's pins directly, they'd casually back away.
Honestly, ISO should be fairly trivial if you use the USART rather than bit-banging. And when you look at $1.50 for the Freescale vs. the $16 ELM (actually, does the ELM also need the Freescale? I haven't looked), there's a significant cost difference in the solutions that should appeal to many. (Keep in mind that the top-selling car over the past decade is Toyota Camry, followed by Honda Civic... both ISO through at least 2005.)
I don't know about the J1850 standards. I still think VPW is probably within reach, but I don't really have a car to do testing with.
We can think about how best to fit into the 14k without configurations when it becomes an issue.
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