No, they didn't. In fact, under OEM pressure, Microsoft foolishly prolonged their life by providing support for a next generation of netbooks with Windows 7 Starter.
Fact is that that you could get a proper laptop for the same money as a netbook, and this was much better for users.
Note that the original netbook (from Asus) had a 7in screen, and this was a substantial part of the cost saving. However, market forces drove bigger screens into the netbook market: 10in became the standard, and some had even larger screens. Prices went up to match.
The netbook actually died because OEMs reduced laptop screen sizes from 13.3in (which used to be very popular) while retaining the extra RAM (2GB or 4GB) and the extra screen resolution (1366 x 768).
At this point, many real laptops with 11.6in and 10.1in screens were cheaper than netbooks, so you had to be an idiot to buy a netbook. Or to manufacture one, which is why they disappeared from the market.
This had nothing to do with Ultrabooks.
Note that Ultrabook is an Intel trademark and Ultrabooks were also required to follow Intel's specification, which made them premium products.
But every OEM was and is able to make whatever thin-and-light laptops they like, regardless of the Ultrabook spec.