Because it's not, and that's stupid. Netbooks are turds. At least the MSI one I played with was. The screen was absolutely horrid. WAY washed out and crappy looking. I think the iPad and tablet form factor in general is actually very well suited to web browsing and video watching.
No flash is kind of a bummer simply for the video aspect (hulu etc).
My netbook has a LED backlight and has a matte finish and looks 10x better than my Sony notebook that cost 4x as much. You are telling me you can get an iPad for $500?