That's what people said about the Galaxy Note. Somehow though last August they hit 10 million sales after less than a year. Many billions of dollars in revenue will help soothe the pain of being made fun of.
Actually when Android first came out phone makers didn't want to make a high-end "candybar" phone because it would be ridiculously expensive, so Google paid to have one made and the demand proved itself enough that phone makers came onboard and Google could retire their own-brand phone. Now Android is the number one smartphone OS, nearly 3x ahead of its nearest competitor and by itself over two thirds of global unit sales. This is probably that evolution again.
OEMs ought to buy a hint one day and when Google says "we're thinking of making an X..." leap into that briar patch. God knows OEMs have made enough failed Wintel and Windows Phone products to hit their career fail quota, and on the winners they make bupkiss, nada, zilch. Google doesn't want to own-brand their products and they're not great at it, but if OEMs will stand in the the way of progress Google needs must march around them and move on. Waiting and begging for people to let go of their Windows obsession was for the old way when Google was not a more influential, successful and bigger company than Microsoft is. Google are becoming less patient with impediments to their vision of the future. Once it was "we think this might be neat." Now it's "help or get out of the way."
Driving Google to get good at product manufacturing, sales and delivery is not a good incumbent device OEM survival strategy. If OEMs make them do that, Google will be as good at it as everything else they set their minds to. I.E. Google will eat the entire client device OEM ecosystem if they must to drive progress. They'd rather not - the progress is what they want and if the OEMs will deliver it they can put their effort in other places. But if they must, they will.
It's a notebook smaller in every dimension than the Macbook Air with higher resolution, the same processor and RAM. Storage is lighter, but that's OK because ChromeOS / Linux doesn't require as much storage. This is not like the Surface Pro that requires 35GB of storage for the OS, Office crudware and recovery partition - the OS probably takes 3GB altogether and wouldn't even install on this little space. It's about the same weight, slightly less battery life, comes in a 3G wireless version that Macbook Air doesn't. Mini Displayport can drive a nice 30" high-def monitor, or your bigscreen with an adapter, just like the Macbook Air.
Not quite sure what you're on about with Outlook and Exchange. Both of those are going to cripple themselves to not play well with anything that isn't Wintel until their dying day - which will because of this be sooner rather than later. It turns out that "Outlook and Exchange" are not quite the definition of "email" except to the history impaired. The sort of machine that used to serve as an email client wouldn't even make a decent watch now, and it used to be the size of a refrigerator.
The small local space is perhaps the point. You can install a real Linux on it if you want to and run ChromeOS in a virtual machine. The processor even supports VT-x. That would be real nice. Since it's already Linux you can count on the drivers. You can remote then to any sort of machine you want to interact with. But any sort of Windows on the local client device is just not going to work for lack of drivers and as you note, storage space. This is not a box to put your pirated Windows 7 on, let alone Windows 8.
If you want to complain about something on this device the I/O features don't include USB 3.0 or Thunderbolt, so it lacks even a full gigabit of connectivity to data in the outside world. There are a couple dozen people in the world who are going to be disappointed by that.
Intel sells server chips into the HPC market. These guys can run LINPACK on a TI99, and would if it gave good metrics per watt and dollar. Intel has a corporate culture to protect their server CPU margins by not "cannibalizing" it with alternatives that cost less and do more. Same on desktop.
Their problem is that if they won't eat the slow-moving members of their tribe, there's another tribe who will.
Intel has a cabinet where a whole bunch of innovation is stored up against a firm competitor. Now might be a good time to pry it open.
Neutrinos are into physicists.