In short, tablet has taken the place of the "crappy tiny laptop", and the modern good laptop has gotten closer to the size of the crappy tiny laptop without being crappy. The sweet spot for the netbook has shrunk to the point where it almost doesn't exist anymore, and thus there are no netbooks.
Both freaked when the netbook first hit. Intel because they could make for a passable citrix client and so undermine their lucrative ultraportable segment. MS because it was Linux on a off the shelf product.
So what we got was some very stringent spec requirements from the two to make a underperforming mini-laptop running Windows XP (remember that MS was trying to sell Vista at the time).
What looked like a interesting experimental market (one early model had a thumb sized touchpad sitting near the screen hinge rather than a touchpad below the keyboard) ended up another pile of rebranded clones.
There are other Windows laptops where the screen folds back to provide a slightly heavier tablet, like the Lenovo Yoga 2 series and the HP11 x360.
Windows 8.1 tablets can support USB keyboards and full-size screens. Hook them up to a expanison hub and they can support multiple screens. I wouldn't recommend one as a desktop replacement, but then, I wouldn't recommend a MacBook Air as a desktop replacement either.