People forget that before netbooks appeared, the smallest regular notebooks were 12 inch models weighing nearly 4 pounds, which came at a price premium (upwards of $2K), and while smaller devices existed, they were expensive, quirky, and underpowered, yet Microsoft demanded that they only run Vista. The original eee PC obliterated the cost/weight barrier, which contributed to its extremely popularity in spite of its other shortcomings, and indicated that there was enormous latent demand for low-end mobile devices. Microsoft, demonstrating its continued cluelessness in the mobile market, took the minimal steps necessary to ensure that netbooks woudl run MS Windows, not Linux, but otherwise did nothing to promote or improve the platform, and sure enough, iPads, smartphones, and their ilk have taken over the market from the low end while pricing pressures have forced down the cost of traditional notebooks from the high end.
My Samsung netbook [Ubuntu NBR] hits the sweet spot for a full-featured "laptop", which I absolutely need when traveling, but is small and light enough that I no longer bother to check bags, even on the smallest regional jets. It will be tough finding a replacement that works as well.