Don't get me wrong, I think that's a good approach: in my experience quite a few App Engine users are new to web programming in general, or could at least use a refresher course. If you don't fall in this category, don't feel offended: you just probably aren't the intended audience for this book. On the other hand, if you've developed for the web but haven't used Python before, you could probably just skip the HTML/CSS chapter and dive right into Python and App Engine.
If you're a blank sheet where it comes to programming, don't expect to come out an experienced Python developer: the book only covers enough of the language so you can get started with App Engine without feeling you're just copying and pasting text. The same is actually true for any topic covered -- in many cases the book actually recommends that you study a topic more in-depth using other resources. But in each case the book's coverage is enough to get you started with the creation of dynamic web sites, and that's the important part. After all, you didn't learn your mother tongue by studying the rules of grammar either: you learned a few nouns, a few verbs, a few adjectives, and a few grammatical forms ("Daddy throw toy again") and you were on your way to communicating with others.
Actually, if you read this book from cover to cover, you might not be ready to create the Greate American Website, but you'll be well past the "Daddy throw toy" level. For example, you'll be creating App Engine datastore models with ease, tying them together with forms, and you'll even be able to use simple AJAX patterns. You will also have learned about the importance of caching, and you'll have more than a fleeting experience debugging problems using tracebacks and logs.
I also enjoyed some of the history bits that Severance presents (it makes me feel old to see 1990 referred to as ancient history :-). A downside is that sometimes the exercises given at the end of each chapter seem to be focused more on assessing that you were awake during class than that you actually have learned a useful skill (e.g. "Give a brief history of the major phases of the internet"). Teachers considering to use this book in the classroom might appreciate such questions; but for self-study, I would focus on the difference between the class= and id= attributes in HTML...
What's missing? The book doesn't touch Django (except for the templating facility built into App Engine's webapp package, which is based on Django). If our customer support traffic is any indication, Django is very popular with professional App Engine developers. The book also doesn't describe the various APIs offered by App Engine for things like sending mail, fetching other web resources by URL, or image processing. But arguably you can learn those directly from the App Engine docs. Oh, and the book doesn't touch on App Engine's Java support. I expect other books will fill that void.