Actually, there's another target audience for these things. People who take public transit. I'm on the train for a couple of hours each day (an hour into the city, and hour to get back out), and it's nice to have a lightweight little laptop I can chuck in my bag. All it needs to be able to do is run a text editor (emacs, for me) and I can do useful work.
"Why not a full laptop?" you might ask. I tried a full laptop, but I have fairly powerful desktop machines at home and at the office. Netbooks are significantly lighter, smaller and cheaper than full laptops. Lighter is important (as is smaller) because it fits in my bag nicely and doesn't weigh me down.
Cheaper is *very* important. A little rain in my bag, falling on some ice, or being bumped by someone could wreck either a notebook or a laptop with equal ease. If it happens to a $300 netbook, I'll be annoyed, but I can replace it easily. If it happens to a $3000 laptop machine, a small random event has just cost me significantly.
To me, at least, the netbook is a semi-disposable computer, something I can use on the train without worrying too much if it gets lost, stolen or wrecked, and something which doesn't feel like my bag has a brick in it.