I understand that's how things work...smaller = more money.
If going smaller means less functionality, than maybe the product should cost less too.
So in the span of a few sentences you forgot how things work.
I don't see how it would have been possible to make it cheaper than the Macbook.
If I wanted an Apple laptop, I would opt for one that had a complete set of connection options. Especially if I had to pay more for mobility. The final size and weight of the MBA is not enough of an improvement to justify reduced capability and a HIGHER price than MacBook.
To you. You don't think it's worth the higher price. To others it is worth the price. Which is why it's a good thing Apple offers both the MB and the MBA. It would be really silly for them to offer only one or the other.
Because for me, for example, if they offered only an MB and an MBP, I would have started looking around for a way to install linux on a little Sony. Because I want a lighter laptop. But I prefer OS X as a "daily driver" so to speak and I don't like small screens. So this MBA is perfect for me (or at least the best real world option out there that I can actually purchase today)
And not so much for you.
What I run on my MBP now is primarily: Eclipse, Textmate, Keynote, Numbers, Pages, Word and Safari and Firefox. That's pretty much it. It doesn't make sense to me to carry a 5 lb laptop when 3 lbs will do all of that fine. My MBP can run all of that without even running at full speed most of the time.
On my MP I run: multiple VMs, Aperture, FCE, iTunes (with a big library), plus the things I run on the MBP. And for that I use terabytes of drive space and 12GB of RAM and 8 cores and all that.
If I could only have one computer it would be the MBP. But since that's not the case, for me having an MP and an MBP just doesn't make sense.
So each case is different. But I'm not bashing my MBP or saying it's silly. Because although it doesn't make sense for me, I can totally understand how it's a good choice for other people.