I like it, but...
The pipe is so incredibly weak. It makes the game too frustrating to have to go back and eat every single monster that appears in a row above me (otherwise, pretty much instant death). Also, when you lose a level, the pipe reverts to its lowest defense. This may be an incentive not to lose, but when a level is lost, it only makes future retries that much harder. This has made many a game concept go bad. You want to be sure that, if the player is having a difficult time completing a level (i.e., losing), you don't make it harder for the player, because that will only make him frustrated.
One other thing I think you could consider doing is offering more types of upgrades to the player. For example, increasing defense is nice, but also allow the option to increase the speed of the pipe (so that retaliation against the monsters can be swifter), or perhaps buying limited quantities of ammunition.