It would be an epic fail on Microsoft’s part to have created all this hype and fail to follow through on it. History would be repeating itself. Remember when the Zune HD was going to kill off the iPod Touch?
That said, a hybrid tablet/netbook device would be the best way to take advantage of Windows 8′s weird hybrid tablet/desktop UI.
I suspect if the Surface isn’t priced below the iPad, then it’s doomed. Simple as that.