Did you guys forget THE iPad killer that swept the world recently... It wasn't thinner than the iPad 2, the hardware is more like the iPad 1 and no longer supported, its OS has been discontinued... People LOVE the HP TouchPad... not for its form factor... but for its price...
There's no way a W8 Tablet could be selling for $99 of course... but what about $250 compared to the $700 iPad 2? You think people think about the few mm and oz?
The iPad makes $250 per unit. The Touchpad was losing $200 per unit. You can't build a business model around those types of loses (especially since the app store can't make up that much revenue loss). Heck, I'd buy a Motorola Xoom for $49, but it doesn't mean that it's a good tablet or iPad killer. It just means that there's a price where you can move anything.
You can't make a decent $250 tablet to compete against the $700 iPad. The $700 iPad is probably about $405 in parts. And that's using Apple's supply chain. For anyone else, they can't order 3 million units. They have to go much smaller, and they lose the supply chain efficiencies and discounts. So you're looking at costs that look a lot more like $550 in parts. So you'd have to sell that tablet at $300 loss per unit. So if you sell 1M you've lost $300M. I don't think that is likely to happen. Plus it hurts the HW ecosystem for Win8 tablets in that no one will want to buy any tablets that cost $500. We'll be stuck in a situation where Windows tablets are cheaply made, and the iPad ones are beaufitul because those customers don't have the expectation of a $250 tablet.