I'm surprised and amused that you think form factor is just about inches, rather than the fact that a tablet is a flat surface vs. a laptop with keyboard, etc., that's not instantly on or usually lacking in touch screen. The whole point of a bigger screen tablet is to give someone a bigger display while maintaining the flat surface touch screen. The reason people use the term "form factor" is clearly because it describes more than size -- otherwise, we'd all just be referring to screen size, lol.
If you try carrying any open laptop, netbook or notebook and walking around (no matter the size) and try to work with it and think that's more convenient than a tablet, even a bigger size one, you'd be one of very few people. It's simply awkward to walk around with any open laptop and try to work, and the additional advantage for many retail settings (once prices come down) is that customers will just be able to walk up to a big flat screen and interact with their fingers to buy stuff, look up stuff, page through products and sevices, etc., versus trying to do that on any laptop. With a tablet, you can easily install in a streamlined way at eye level without the awkwardness of having a laptop installed.
As long as iPads have been made, there have been plenty of cheap netbooks and notebooks available for less, with more pure computing power, and in similar sizes. If people used your criteria and ignored form factor, they would've bought those instead of iPads by the millions.
The iPad Air are faster and more powerful than netbooks.
Also tablets are different from netbooks. They serve better purposes (But not more) than netbooks or smartphones. Wouldn't it be hard to just open your laptop and wait until it opens to search for a specific thing? With an iPad you can just, open it, then open safari or pull down in spotlight search and have instant access to the internet and wikipedia? Or if you want to play games, songs, and videos?
Tablets, offer greater purposes than smartphones and netbooks in terms of instant internet, media, and showing files, pictures, documents, playing games, and other thngs.
I believe in the term: Cheap products are bad products.
Also form factor is very important. Would you use a product that is very heavy, very big that it cannot be used? It is very important.
Also tablets were never used for productivity. The reasons why the iPad is the leading tablet in this class of gadgets is because its not like other tablets that have keyboards. Apple smartly keep them what they are: Tablets. The reason why the microsoft surface and blackberry fails is because adding physical keyboards in devices that small will not be hard to type in. Tablets are used for different purposes. Apple smartly makes it only a tablet.