In brief: "We've got a good product, but we don't want you to buy it because then you'd never buy our more expensive shit one."
It seems that Dell chose to kill off the popular Inspiron Mini line in favour of pushing less functional things at higher prices. It's not surprising that they wanted a higher entry point, because like all hardware manufacturers they'd much rather sell things with a good margin than allow £200-300 range portables to cut into laptop sales. However, driving your customers to other manufacturers isn't a very good idea either, and even amidst tablet fever it's doubtful that everyone else will agree to stop producing netbooks entirely.
The Inspiron Duo has the same screen and a keyboard, so technically you could make the case that Dell is still producing netbooks — except that at a launch price of £450, they won't sell to anyone looking for one.
The rationale for the jump in price is that the screen is reversible into a tablet, meaning that this device is competing with the iPad and tablet Kindle. About the only thing it seems to have going for it in that respect is that it runs Windows, allowing existing software to run in a cramped resolution of 1366×768 on a 10.1" display. That currently means Windows 7, which isn't designed for touchscreens in the way Microsoft claims Windows 8 to be. (That's a separate rant — early signs for the tinfoil hat brigade are that Microsoft has gotten into bed with hardwave manufacturers to compromise desktop computing enough that consumers might be enticed to replace existing kit with touchscreen monitors.)
The 4-cell battery in the Duo apparently gets you about 3hrs of use, which is terrible compared to a 6-cell battery in the Mini that runs for more than twice that.
There's no VGA out and no network socket, so this is a toy unsuitable for business use.
It weighs 1.5kg and the keyboard's not detachable, so it compares poorly to the tablet + dock combo that it's retailing against.
Seriously, who is this thing aimed at?
We get that the technology industry has been riding unsustainable growth by getting so much product into circulation that forced obsolescence is the only way to drive further sales. We get that on the software side Microsoft has shot itself repeatedly by allowing Windows XP to be on sale for seven years (driven by the need for a netbook-friendly operating system as much as Vista being crap) with a support lifecycle of about thirteen years, and creating expectation. We get that desperation and obligation to shareholders are behind the confused marketing messages and much of the rubbish currently being produced. Buzz phrases such as "perfect storm" are actually beginning to make sense.
This doesn't really answer the question of who manufacturers such as Dell think products like the Inspiron Duo are going to be bought by. Maybe the hope is that people who aren't interested in huge compromises will buy a laptop rather than a netbook from someone else. In the meantime there are a lot of tablets and hybrids being hastily knocked out that are at high risk of ending up little more than an embarrassment to corporate bottom lines because they can't compete with Apple and Amazon.
Dell do a partial about-turn, shave £100 off the Duo price tag and offer business customers (who are quite keen on highly portable, functional kit) the Latitude 2120, a more typical netbook in a 'business-like' chassis with lots of square angles, as a premium option. At £380-460 excluding VAT for standard options, it's doubtful they'll get many takers.
The selling points of netbooks are that they're light, offer long battery life, and are cheap enough to be treated as relatively disposable. Coming with a gigabyte of memory and Windows Starter generally aren't big issues, as consultants will often pair this with a 3G dongle rather than faff with corporate networks and home users primarily want to bash out an essay, browse Facebook and use instant messaging. The ~£250 price tag (that's including VAT) of models with ~10hr battery life Samsung and HP are currently offering exemplifies these niches.