Competition is definitely good. But the trademark issue is much more complicated than just the exact words/phrasing. It could be argued that they're using $FRUIT Pi to appear to be associated with the original Raspberry Pi (and I'd say that argument is correct, there's very little other reason to pick that same naming scheme). That doesn't mean that it's certainly a trademark infringement issue either though. In the US at least (no idea about the UK where the RPi is from), there's also a requirement that they're trying to confuse the market at the same time, which isn't so obvious.

Trademarks are complicated things mostly created by lawyers who have spent centuries building through loopholes and attempting to fix them. I'd say they serve a real useful purpose and are relatively well balanced against the interests of the populous (once you stop using one, you usually lose it). But they're by no means simple.