you're comparing your current, HD dvd burning, 4 slot, 2 port, 2 USB cable 17" widescreen portable desktop to what the air is: an overblown (and priced, in my opinion) iPod that can run an OS. This shit isn't for folks with one computer, it's for folks that have a home desktop setup that want something hyper-mobile and still capable of base functions. It's not like the iPod replaced your entire CD library and home stereo, did it? Same idea. When you're at the coffee shop working on a paper or surfing the net, how badly do you need an optical drive or more than one corded (keyword) peripheral?
But for the current price point, no, it's a bit silly and yes, people will still buy them.