Lewislynn, in your math you forgot the final step. You said you would "play the silly price game" but then forgot that there would be no additional net tax on the final consumption. Your example shows the landlord reducing his rent by 25% pre-tax but prices on the goods going up by 23%.
In other words, if he had $750 after tax currently to spend, and 25% of the costs of his goods and services is the cost of the embedded system, his pre-tax FairTax costs for those same goods would only be $562.50 and his after tax cost approximately $732. He doesn't lose purchasing power in that example.
If you're going to use an assumption, you need to follow through on it.