Because tablets are hot right now. So MS thinks that selling a bad tablet that also is a bad ultrabook must sell like hot cakes, because everybody badly wants the "full PC experience" everywhere.
I'm actually pretty sure that with a Core i5 in a 10.6" screen chassis, that this tablet will certainly run pretty hot. 4.5 hours of battery life won't help very much either. It's too much of a compromise. To complete with tablets, you need 8+ hours of battery life. To compete with good ultrabooks, you need that as well. But that adds too much weight with an x86 processor.
A budget is just a method of worrying before you spend money, as well as afterward.