You people who are going "oh, this isn't an on-ramp to WP, it'll kill it, no one will buy WP" are completely missing the point. This isn't to help short-term growth of WP, but more for long-term growth. The fact that this phone runs Android and has more apps than WP is exactly why this is a great idea.
Here, let me paint you a hypothetical timeline:
Year 1: Nokia X launches
Year 2: With Nokia's amazing design and most of the apps of Android, Nokia (now Microsoft) gains 10% control of the android market. Combined with WP, this means that 15% of all phones run Microsoft services.
Year 4(complete speculation, but this is the idea): The X family has 20% of the Android market share, WP has 10% market share. 30% of phones run MS services. The only way for Google to get these people back is to take their apps out of the GMS codebase and put them in AOSP (which would push more OEMs to AOSP, bad news for Google) or put their apps on WP (which would be one less barrier for people to switch to WP, bad news for Android).
Year, lets say... 5: Microsoft makes this X family run WP10. By this time, the app disparity will be gone. MS controls 30% of the market with WP10.
This plan is a great idea. As a matter of fact, writing this has got me thinking of a way that Microsoft could be #1 in the mobile marketplace. Expect that thread in a couple of hours.