$200 for the Surface? Sure, in Bizarro World.
If they want to compete with the iPad, they'll need to get down into the $500-$700 range, but I doubt they'd be giving that kind of price guidance if anything under $400 was remotely possible in Microsoft's own view - their estimate is probably a "best case" outcome given how incredibly fuzzy they were about it. (Arguably they could deliver at $1000 and claim they're still "competitive" with an Ultrabook.)
For less than half the price you get more than half the performance. I don't think theres benchmarks out there yet but I don't think its fair to say that a Tegra 3 Quadcore is 'low-end'. It's on par with the A5& A5X technically.