Not two-factor authentication
Whilst this may be able to make CNP transactions more secure, it isn't two-factor authentication - the card alone is all that is needed to complete the transaction. The Card Authentication Programme (CAP) extension to the EVM standard requires the entry of a PIN in order to generate OTP, challenge-response or digital signatures - therefore authenticating the card AND cardholder
At a cost of "$25-$30" I would suggest that this is actually significantly more expensive than a standard card and EMV-CAP device. I presume it also requires proprietary software on the issuing host to validate the one-time-passcode. EMV-CAP leverages the standard EMV cryptographic infrastructure.
To be honest, I can't see this getting off the ground without the support of the card schemes (Mastercard & Visa) and they are committed to EMV-CAP.