I've got L5R on my Christmas list, but I was just browsing through some of Team Covenant's videos trying to understand what it would really mean to start playing. Is this a game that would stand on its own two feet as a decent two-player game, or will it end up being more like Magic in the since that I'll want to keep getting more cards to build better decks?

Both!

Start with a single core set. That's basically the demo game. See how you like it.

To play the full standard tournament game, you either need a second core set or one core plus a bunch of the expansion packs. Most players will recommend a second core set, because the core just has so many good cards.

To play competitively, you probably want a third core set and most or all of the expansions.

Two or three cores is enough to let two players each make their own full tournament-legal deck and play a game against each other. With only two cores, your options will be limited, though.

Because this is a game that depends on deck building, if you're supplying all the cards for two players, you're going to have to rebuild decks every time someone decides they want to try a different clan.

Fortunately, because this is an LCG, not a CCG, the expansions are not randomized. Everyone who buys "Tears of Ameterasu" gets the same cards as everyone else who bought it. That means, in the long run, this game is much cheaper to keep up with than games like Magic where you are relying on randomized boosters or buying singles on the secondary market to build a competitive deck.

It can be both depending on how much you like it. I predict you will enjoy it quite a bit and will want to get at least 2 core sets, the dynasty boosters and whatever clan packs come out for the clan(s) that you end up liking the most.

You are lucky enough that the game has barely started so you can get on board for not a to high investment compared to other LCGs.

Even if you don't want to play competitive and stay casual, new cards will add new options and make the design space of the game expand , adding interesting new things to consider when building your deck. I would advise to get everything if you enjoy the core experience as long as you can afford it.

One thing: Most LCGs are playable with one Core set as an introduction, okay with two, and the 'real' game has three Core sets. With L5R, I found playing with one Core absolutely horrible, and gives a very distorted view of the main game - games tended to go very long, as several factions find it hard to achieve the basic win condition without the consistency you get from extra Core sets. In comparison, something like A Game of Thrones 2.0 had a reasonably playable format out of a single Core.

As such, I'd really recommend trying to start with at least two Cores to get some idea of how the game actually plays, with three being preferable if you really want to have a two player game. From there it's a matter of whether you want additional options or not.