I don't doubt your experience but the linked video emphasizes that the cost for the device with XP was the same $399.
This is from a random contemporaneous TechCrunch article about the 2nd/3rd? gen offerings:
Eee PC 901 (Linux or Windows): $599 Eee PC 1000 (Linux or Windows): $699
https://techcrunch.com/2008/06/13/new-eee-pc-models-get-us-p...
So I checked on the Internet Archive; we sold the EEEPC 900 with Linux for €329, and the Windows EEEPC 901 for €409. The Linux had a Celeron M and the Windows an Atom N270, so I guess I misremember them having identical specs.
I assume the Atom is faster(?) The XP machine felt slower though.
Either way: people wanted what they knew, which was Windows, and they paid more for it. I wrote about this before: https://news.ycombinator.com/item?id=41431733