Yep, manufacturers overestimated the market capacity for Tablets. In the end they're a fairly niche product, and everybody who wanted one pretty much has one at this point. They aren't useless, but they aren't compelling for most people either. You get a device that's the size of a small laptop, but less capable because it's crippled with a phone OS and no keyboard. I use mine somewhat regularly, but only for a handful of tasks:
1. Reading full color comics. The Kindle sucks for this.
2. Watching video on the go. Much better experience than the phone, but this is only for long car rides and is used to keep the kids entertained.
3. Playing games. My phone is an iPhone, so all of my Android gaming has to be done on the tablet. This is a very niche use, and it really only came about from me looking for a reason to even turn the thing on in the first place. Were it not for the Humble Bundle I don't think this would even make the list.
Web browsing and email are also possible, but the experience is decidedly worse than a laptop so I don't usually do it. Especially if I have to reply to an email.
The big advantages with phones is portability. They're always in the pocket ready to go. Tablets don't have that, yet they're stuck with the same drawbacks that phones have like touch controls and a locked down OS.