The reason I say it was scary was that it was a moment in time where you could watch a class of computers from one generation to the next get worse because of limits imposed by Microsoft on OEMs. I bought a Dell Mini 9 just before they switched to the Mini 10. The Mini 10 actually had half the memory capacity of the Mini 9 (1GB vs 2GB in the Mini 9), because Microsoft defined "netbook" to have a maximum memory size and CPU power, which was lower than what netbooks had already climbed up to. Microsoft didn't want to see their margins decrease on "real" computers, but didn't want to cede the low end market to Linux. They saw the power of cheap then, and will probably see the power of cheap now. The difference is they don't have enough clout with enough manufacturers to dumb down these small computers.

So, yeah, I'd be surprised if they don't respond. They already have very low cost Windows Phone licenses in order to compete with Android (but it's not really working). Honestly, I believe we're entering a post-Microsoft world, even on the desktop. It'll be five or ten more years before Windows is no longer commonly seen, but it's already not really a foregone conclusion that computers should have Windows on them.