Exactly - how can you hurt the Windows brand when the whole point of the product was to commoditize the hardware to bring the cost of the total solution - hardware + software - down in price? Microsoft's goal has always been to encourage and in some cases even mandate interoperability. That's typically been thought of as a good thing, but you can't be surprised when hardware makers do everything they can to cut corners - when you're selling a commodity you can't charge anything above the prevailing marginal cost of production. The only path to success is to ruthlessly cut the cost of production.

If your product is being commoditized, the only way to seek margins is to fight commoditization. You do that by deifferentiating your products. And what laptop OEMs seem to have concluded is that differentiating on build quality/design/attention to detail/form factor wasn't an option.

And they continued to believe that even when Apple demonstrated conclusively that people would go out of their way to buy Apple hardware, rip off the Mac OS that they'd paid for, and install Linux/Windows on it.

Why is it obvious to Microsoft that the Surface Pro, or the SurfaceBook, is a valid addition to the PC hardware marketplace, but it wasn't obvious to any of the many competing OEMs?

How profitable is the Surface for Microsoft?

Does Microsoft consider it a loss-leader reference design?

If it's been profitable, why hasn't anyone else in the PC space copied it?

I believe (don't quote me on this) Microsoft is closing in on a billion (1) dollars in annual revenue from Surface. Not sure how much is "profit" but someone who follows earning more closely might be able to clarify.

If the form factor is really that successful, I wonder why no one else is copying it? The Surface itself is made by a Taiwanese company named Pegatron, which is a division of Asus - so it's even being made by an established PC hardware company.

"how can you hurt the Windows brand when the whole point of the product was to commoditize the hardware to bring the cost of the total solution - hardware + software - down in price? "

You answered your own question. The OEM's "ruthlessly cut the cost of production" too far and thereby damaged the PC brand.

This "ruthlessly" cutting of costs would have been survivable, however with Apple attacking from the flank with the iOS/app model, the PC makers were/are now in an even deeper hole.

Depends on which era you're referring to.

Yes, low cost hardware drove Windows/PC adoption in the 80-90's. This was key to Windows success.

However, throughout the 00's the continued downward pressure on pricing by OEMs, Microsoft's questionable decisions, and the cheapening of the PC brands, caused consumers to be seek a premium alternative.

I believe it also makes sense to separate the consumer vs enterprise markets. Buying Microsoft at home is not the same decision process as buying Microsoft at work.