The laptop has always been misdesigned. It makes sense, but it doesn't work well for truly mobile people; unfolding, sitting, balancing if without a table, etc. Ergonomically a disaster.
A tablet of the right size would be perfect for MOST people. While it might not be a high end gaming device, it would do most of what people do on a desk model - internet, email, word processing, simple graphics work, music/video playback, organization of data and schedule.
If Mac made a 7x10 hand held similar to a large iPhone I believe it would be an instant success. Personally I have always loathed notebooks, and have owned several so I know first hand. Getting rid of the keyboard for on screen keys would be awesome, and getting rid of the fold up aspect of design would be supreme. If Mac can figure a way to get the device starting quickly from off, or a sleep mode that doesn't drain the battery over several days, it would be perfect for anyone on the go that doesn't do heavy gaming or serious graphics computing.