Javascript sucks as a language but there's a huge numbers of developers that know javascript, and of the ones that don't many use C derived languages which would make it easy for them to pick it up.
Another major advantage of Javascript is that it is continuously optimized in the ongoing race for performance in the browser. The node engine has been shown multiple time to be significantly faster than other interpreted languages.
Finally, while young, node has a quite nice eco system.
"Javascript sucks as a language but there's a huge numbers of developers that know javascript"
The same could be said of Visual Basic. I still wouldn't want my thermostat running VB.
"Another major advantage of Javascript is that it is continuously optimized in the ongoing race for performance in the browser"
In an embedded system like this, what you want is something continuously optimized to be bug free and work without fail, not something optimized to be mostly ephemeral and need to work in an environment where if you leak memory for 45 days, people rarely notice.
Browser performance is also not optimized for anything that matches the application workload of this kind of device.
Given that this is realistically a tool for hobbyists or people rapidly prototyping a concept, does it matter if you choose to build a thermostat in VB (assuming you liked VB enough to consider it) or hand tuned assembly?
Anyone who tries to bring a product to market with this will presumably be crushed by those who can use less expensive components from better optimized code. At scale, even a few pennies per unit can make a huge difference in your profitability. It seems quite unlikely, for at least the foreseeable future, where you will buy an off-the-shelf thermostat with one of these inside - or anything else running Javascript for that matter - simply due to component costs, if nothing else.
But if you are a web developer who wants to hook up a light that flashes when someone visits your web page, something like this might be a reasonable choice. Being able to build something that works reasonably well with minimal effort is appealing. Who cares if it adds $30 to your BOM and maybe doesn't work every single time?
Personally, this is probably not a device I would be interested in. Playing with embedded systems at a low level is what makes it fun for me, but not everyone wants to learn C and assembly just to throw together a project in their spare time. I think this could be a pretty great product for that certain niche.
Devil's advocate, being 100% stable is somewhat less of a concern when you have a wifi link for easy update.
Besides, you can choose sensible things. if you need something stable you stay on a known stable version of node (which has it's own issues of course).