Why are netbooks so popular?

I've been wondering lately why netbooks are becoming so popular. I've always seen these devices as a small niche market between smart phones and real latops. They seem to be smack dab in the middle of the two worlds, with few of the advantages of either. Smart phones are ultra portable - they fit in you pocket. They may lack in processing power and screen real estate, but you can take them everywhere. Laptops are not as portable but you can still take them with you on the go. They can have considerable processing power and good screen size, so they are still very useful computing platforms.

Netbooks seem to fall in the middle. They are small but not small enough to carry in your pocket, seems like you would still need a briefcase or bag to carry them around in. They don't seem much more powerful than a smartphone and have considerably less screen real estate than a laptop.

Maybe I'm just not the target audience. I either want ultimate portability, where I'm willing to sacrifice performance; or I want ultimate power so I can get real work done. But I'm a software developer and a techie, so I probably have different needs than the average Joe.