What's wrong with this bike?

Nothing, really, except that the model has been around a while and I expect they're just blowing out remaining stock.  And as a strictly internet dealer their low overhead is reflected in their prices.

Bikesdirect is a legit outfit, lots of people have and like this bike, frames are generally good quality and 105 components while not top-of-the-line are generally considered fine for serious cycling.

At $1300 from an on-line retailer- that's probably exactly what that bike is worth.  It's an older frame, not particularly lively or stiff.

As was stated by Jan above, it's not a tri geometry so it will be hard for you to get a good, comfortable aero fit (possible tho, depending on your frame).    If you are going to buy this bike, it's probably a decent buy as a road bike, but for a few hundred more, you could get yourself a really terrific aluminum bike (yes, I'm thinking of the Cannondale CAAD 10-5) from an LBS.

bikes direct is a legit business, but their 'deals' always seem better than they are for what you're getting.  I expect that they sell most of their bikes to people fairly new to the sport and are trying to save a few bucks. 

Kestrel does make some terrific products, so it's a once-again up and coming brand.  The 4000 is a top of the line TT bike by any measure.

Average price for what it is. As someone said, this is old stock.

Nothing is fishy with the price!

Nytro sells this bike as part of their "everything you need for $2k" triathlon starter package:

http://www.nytro.com/triathlon-packages/buy/tri-starter-package/