While I can see AT&T/Apple subsidizing a netbook, I don't see it being under $99 new in the US. You mean you can get a computer w/ more features than the iPhone for less than have the cost (not including monthly subscription costs)?
You fail to understand one thing: iPhone is not an alternative to a netbook and vice versa. Netbook is not a phone. iPhone is not a computer. Netbook is bigger than a phone. People are NOT going to start thinking "why should I get an iPhone when I can get a netbook instead?".
And besides, you shouldn't stare at the initial price. the real cost is in the service-fee. Apple made a big deal how the iPhone 3G is cheaper than the original iPhone, but fact is that it's more expensive.
And as far as netbook is concerned, the monthly plan would probably be cheaper than the iPhone plan is, since it doesn't need SMS, MMS or voice-features.
I agree with those that say Apple sells "Premium" products, or at least premium priced products.
iPhone is a premium product, and I can get one for 1e.... Just becauise it can be had for 1e does not mean that people think that it's an el-cheapo phone.
If these rumors are true, the netbook would most likely be available without subsidies, but then it would probably cost over 500 bucks.