It's classic microsoft, to translate their monopoly in PC OS into tablet marketshare.
I think the decision process will then be "is the touch screen and a little less weight worth giving up the performance of a real laptop?" And (as much as I love my tablet), I think the answer to that won't be a resounding "yes".
Microsoft knows exactly what they're doing. And I agree, due to it's similarity to a conventional laptop, they won't sell as much as they could. That being said, the Surface Pro is a bad-ass piece of machinery, and probably going to be hard to beat any time soon.
Aside from those points, I agree with what you said. From my perspective though, who in their right mind wouldn't want a tablet with a dual-core hyperthreaded Core i5 with 4GB of RAM and a beautiful 1080p screen?
I would want a tablet with a core i5, 4gb ram and a 1080 screen, IF it still feels light, runs cool, and battery lasts as long as an iPad.
How exactly do you figure that Microsoft is one of the largest players in the tablet market? PC market, yes, but they're a late new comer to the modern tablet world.
Now as far as asking whether they would release a tablet that runs hot and has poor battery life -- I don't know, would they release a tablet that suffers from 5+ second delays while typing: https://www.youtube.com/watch?v=VTtf_BgFS08 ?
In the same way that Vista was a disaster due to its changes and incompatibilities, Windows 8 is a version 1. And in the same way that, by the time Windows 7 had come out, the industry had adapted, new drivers had been written, C# was a standard, etc, etc, when Windows 9 comes out 2-3 years from now RT apps will be widespread, Windows tablet hardware will be a couple of generations refined, and Office will probably work with Metro.
And there will be glowing reviews talking about what an achievement Windows 9 is, how it is the best OS Microsoft has released in years, and how it completely wipes out the colossal disappointment that was Windows 8, ignoring of course that Windows 8 like Vista before it provided the foundation upon which the new system is built.
Will Microsoft be around forever? Who knows, but a company this large, only a few years removed from the success that was Windows 7, is going to get at least a few more kicks at the can.
If they miss an inflection point, they could be in deep trouble.
At that point their sales are declining as people move off desktops, and they face the much higher bar of having to convince people not only to buy computers with their new OS but drop their investment in other platforms (such as apps purchased).
At some point they won't be able to count on their market still being there by the time they have an OS people want.
So to clarify, my opinion is that they're probably pretty safe as far as maintaining their position in the PC world even if Windows 8 bombs as a PC OS. Losing entrance into the tablet world for two extra years on the other hand is a lot worse since it would be very difficult to get those two years worth of tablet buyers to switch to their platform after having already bought into another during that time.
How the second part actually plays out in the real world is really hard to predict since a lot of it will be based on the hardware that runs the OS. For example, I personally think Windows 8 is a pretty poor Desktop OS, but I'd definitely consider it when buying a tablet. So my problem isn't so much the OS but their current flagship device; the Surface RT looks to have too many deal breakers for me and I don't think I have a need for the Pro version.