Yes this is a $3 bagel, and yes it is really good.
Schmendricks is a pop-up bagel shop here in SF that is making all the headlines. Their press page links to most of the coverage from the media. Serious Eats also posted a more in-depth series on their beginnings.
Beware that the bagel half-life is definitely in effect here. As Serious Eats found out when they tried to do head-to-head taste tests in NYC, a bagel will lose most of its awesomeness 30 minutes after it's come out of the oven:
Our conclusion? A bagel's half-life, untoasted and unadorned, is no more than half an hour. It was far less than any of us had thought, but after more than thirty minutes, we saw a rapid decline in texture, crust, and even taste. Brooklyn Bagel's initial victory? Simply a matter of freshness.
I've tasted Schmendricks bagels at 10, 25, 40, and 90 minutes after they've come out of the oven and absolutely agree that afterthe half hour mark they take a turn for the ordinary. So my advice is this: eat a Schmendricks bagel while it's still hot and you'll swear you've just had a real bagel for the first time; eat one after it's cooled and you'll wonder why you didn't spend that $3 at Tartine Bakery instead.