Computer-wise, this is competing with $500 conventional laptops, and cheaper-still desktops. However, it's basically on-target with the price of other Ultrabooks. Once you realize this is basically just an Ultrabook with detachable keyboard, it starts to make a little more sense. It's absolutely possible to argue about all Ultrabooks being overpriced... I mean, to make an Ultrabook from a laptop, you toss out the optical drive, replace the HDD with an SDD, toss out half the ports and double the price. But for some, that level of portability is worth it. Ages ago, I paid considerably more for a very compact laptop (Fujitsu P1100), back then, the only thing that really had battery life for transatlantic flights.
It's kind of silly to compare this to other tablets. Microsoft made it a functional Windows tablet, largely by including the good digitizer ... something that should have worked as well in Windows 7 or previous -- you can drive any version of Windows with a Wacom, you can drive it with this.
But two big things with tablets. One, simply put, is that they go all day. I ran my Transformer on battery for an 11.5 hour meeting last week, and had plenty of juice for the three hour ride home (yeah, I had the keyboard available, though I most just used it as a tablet). Given the untethered nature of tablets, you'll find far more applications that are specific to mobile activities, rather than the desktop nature of Windows.
The Ultrabook is also a very limited Windows computer, in general. Unless you're a secretary or some other easily satisfied worker-bee, there's no room on these things for a professional complement of applications and data. Too slow for CAD work, not remotely enough storage for video work, etc. Probably fine for management types, who need email, memos, some simple spreadsheets, and a few powerpoint decks.
In short, as a specialized Ultrabook, the Surface Pro has an audience, but it's a very niche product. All these Windows fans claiming they'll use this for everything... the same folks, often, who were raving about their fast i7 systems with TB of storage last summer, that's just nonsense.
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