Disclaimer - I'm an Apple fan. Mac's iPhones, iPads etc...
Surely though some of these PC Netbook are powered just fine?? I have a couple of blogger friends who use them (mainly in wifi free cafe's) to produce video blogs, video uploads / edits etc...and they also use the built in camera for creating some of these video blogs too...
I never hear them complaining that their Netbooks are underpowered etc...and they can actually import and edit video - unlike me on the iPad! Perhaps they didn't just spend $500 though??
Are all netbooks garbage really - if you don't mind the small form factor?
I think netbooks are OK for ultra portable computers. I have seen and worked with couple and they did all the usual tasks fine. Features like native DivX/XviD playback, big HDD, capability to copy photos/videos from camera etc, in my eyes, puts them in completely different category from iPad and Android tablets.
I don't even think competition from iPad is hurting them. There is natural saturation of that market segment - when you look at typical netbooks, they haven't changed much once they evolved from 7 to 10" and from Celeron to Atom... which is reducing reasons for netbook upgrade/replacement to virtually ZERO. Plus, more and more brands are coming out with their offerings - I have recently seen Viewsonic netbooks, for example.
Additionally, part of netbook market is shifting to ULV market. ULV Core 2 duo netbooks, while more expensive and bigger (11 - 13" usually) are actually the only upgrade alternative for people who need to replace their netbooks for something stronger yet still highly portable.
And finally - I think Asus is coming out with a couple of tablets for this holiday's season? Others will follow. Dell Streak is already out and, according to Anandtech.com, screen size is just about right, Android 1.6 being major if not the only let-down for this device (which Froyo update should sort out nicely).
Bottom line - really big number of reasons for netbook market to slow down, iPad maybe being one of them but hardly the one. However, this is Apple Insider - so this reasoning is sort of understandable