Of course it's not as good as dedicated devices. If it was and did more then everyone would be gushing over it. It's a first generation product whose limitations are hardware that is very likely to be resolved in the very near future. The first smartphones weren't as good phones as Nokia dumbphones because its battery life was poor, typing was much harder etc. It also wasn't as good a PDA as whatever existed because the screen was too small, the battery life was **** etc., and it wasn't as good a camera as the small Sony/Samsung digital cameras because the sensor was **** and the megapixels were incomparable. It also wasn't as good a music player as the iPod because it had limited storage. But all in all, it approximated the job of those devices quite well. It never was able to approximate 100% of the functionality and to this day, it still can't compete with dedicated devices in their specific area, but as a general product, it's bloody great, isn't it?
Now let's speak about the Surface in similar terms. How much of tablets can it approximate at the moment? In software terms, for me, 100%. Anything you can do on the Nexuses, iPads, Notes and Galaxy Tabs, you can do on this. It fails on the hardware stuff, namely its weight and poor battery life. Will Haswell help? Will general evolution of hardware help? I would say so. How much so remains to be seen but straight from the start, you can see that it is not far from being able to approximate most of what the iPad does.
How much of ultrabooks and MBAs can this approximate? Again, on the software side, there isn't an issue here. On the hardware side, also, there isn't an issue since it's running virtually the same stuff that an MBA is and its internals are comparable to ultrabooks. The only issue is ease of use and the kickstand. These aren't problems that can never be resolved. It'll require some imagination but with so many people invested in this platform, I'm quite confident that sooner or later someone will stumble upon a solution.
In response to the comment that someone made about how PC makers have been trying and failing to accomplish this for years, I completely agree. Hybrids and tablet PCs have failed for years because they were terrible products. But they weren't terrible because they were poorly designed or had poor hardware. They were terrible because the software was terrible. That isn't a problem anymore. This is the key.