You left out one market segment, likely on purpose, people who bought tablets, found they had just purchased a useless toy and will likely never buy another one.
It probably depends on who you know or maybe it's an age thing, but I don't know anyone in this segment. Don't jump to conclusions ("..likely on purpose...") just because you're a different demographic.
I'm guessing you're a millennial? Not meant as a negative jab or anything, that's just the demographic I know the least, and all the others seem like regular users of tablets: grade school kids -- all have tablets and would use them 24 hours a day if you didn't stop them. Their grandparents -- they love the tablets, much bigger screens than phones, easier to read, type, way easier to use than laptops.
As for my age group in the middle of the two, that leads me to your second part of the post:
So the tablet squeezed in between a smart big screen TV (no comparisson in viewing quality or comfort, craps all over tablet) and the phablet (portability craps all over the tablet and soon to come out enhanced output glasses, a big screen TV in your pocket).
Big screen TV has no mobility whatsoever. I'm rarely going to have long uninterrupted periods of just sitting in front of one (and will use the projector/media room when I do want ultimate viewing comfort and quality), so being able to watch something on a high-res screen a couple of feet from my face still gives me some very good viewing quality, with added comfort of being able to watch it anywhere -- on the patio, in the bedroom, on the plane, etc.... I just take it with me and all my media is on there already.
So, sure, it's not as pretty as a big screen TV, and it's not as mobile as a phone. But it's also much prettier than a phone and much more mobile than a TV. It depends on what matters to you, right?