Can you cite a source for that cost? That's 35% Windows tax, which would leave the market ripe for Linux boxes to undercut and pocket the difference. In my opinion, we'll take computers as cheap as we can get them and remote to the big iron; this being a "small" market is wishful thinking by established players.
Even now there are plenty of people that would like sub $100 netbooks to disappear as soon as possible because there is very little room for bundle deals at that pricepoint.
If you strip out the windows license on this thing it costs about $65.