Netbooks are not dead
While computer manufactures have stopped making netbooks in the US--probably because Microsoft is no longer making Windows 7 Starter available to OEMs here--netbooks are still available.
For example, Lenovo still sells the S110 in India for about $370 US, and suppliers in China still make netbooks which can be readily bought and sent to the US.
Netbooks were a product niche which never caught on in the US. They are not suited for power-users who want to play modern video games on all of their PCs; their 10 inch size is too small for many users. With companies starting to make 15-inch laptops for about the same price as a netbook, they stopped having appeal for the "give me the cheapest computer you got" crowd.
Then again, there's a lot to be said for the 10 inch form factor. It's small; the keyboard, however, is still usable. It is far easier to generate content on a netbook than on a tablet. While it is possible to attach a keyboard to a tablet, the resulting system ends up costing far more than a netbook ever did.
The first netbook
The first netbook was probably the Gateway Handbook, which you might be able to see pictured above. It came out in 1992, and was about the same size as a netbook. Like a netbook, it was very small. Like a netbook, its computing power was the equivalent of a computer from eight years before. Unlike a netbook, the Gateway Handbook cost US $1295 in 1992--some 305 hours of labor at the then minimum-wage rate in the US. A netbook cost roughly $300 in 2010--only 42 hours of minimum-wage labor.
I still consider the Handbook a netbook. After all, anything to do with computers was expensive back then. It was before the Internet was readily available for home computers; it was only during the dot-com revolution that computers became desirable enough again for end-users that companies like eMachines figured out how to make one cost less than 100 hours of minimum wage labor.
I took the above image years ago and submitted it to the Wikipedia; a higher resolution versions of this image can be seen there. To post a comment about an entry, send me an email and I may or may not post your comment (with or without editing)