I'm sure this has already all been said, but just to pile on...I seriously doubt size is Microsoft's primary problem busting into the tablet space.
Seems like they should focus on fixing, by all reviews and accounts I've read, lack of apps. Or perhaps more succinctly, according to many reviews and comments, the inability to run Windows desktop apps.
However I must admit I am perplexed. My iPad doesn't run OS X apps and yet the iPad is well loved. Lusted after even. Why do we all scream for the ability to run desktop apps?
Simply opening the Win RT space to all windows desktop apps seems like it would only frustrate consumers with apps that weren't designed for the tablet form factor and don't meet their needs on a tablet. Pointing at ARM as the root problem is a technical excuse for something everyone thinks they want but can't have.
I don't give a crap my iPad is using an A6X processor and my Mac is using a i5. Why should I care if my Win RT tablet is using ARM and my desktop PC isn't?
I think it's more correct to say the iPad has a significant number of the *right* apps to make it attractive. By "right" I mean serves use cases for the tablet form factor.
Everyone also seems to focus on the pure quantity of apps available as a measure of success for a platform and why I want to invest in the platform. I suppose pure numbers are great because you are statistically more likely to get a hit on the *right* app. But I don't want to spend my time browsing millions of apps to find the right 0.01% I'd actually use. This is my #1 frustration with the Apple store.
Obviously MS is working hard to get the "big hits" from other tablets onto theirs. These are table stakes.
If I were Microsoft I'd also start working hard to understand the core things people do with tablets and look at the most popular desktop apps in their space to identify target applications to push for ports. Ideally unique applications the other tablets don't have yet. Their advantage is the desktop market. They need to bridge their desktop users into tablets with the applications their customers identify with. Office is a great start, but obviously still not enough.
They also need to leverage their small app space as an advantage - it's easier to ID and promote the *right* apps when you don't have millions of crappy apps to wade through.
That at least gets MS into the game. If they want to get ahead they need to identify and successfully execute on a disruptive technology. The space is becoming too saturated at this point to compete at status quo