It actually costs them more to make things small because of all the thermal management and structural design etc.. Netbooks manage it cheaply by using quite old tech parts (atom has usually been equivalent to a p3 or something like that). You increase specs, it becomes a more complicated to fit everything in while keeping everything working right (esp. overtime avoiding overheating etc..). There's a reason you don't see a quad core 2g sandbridge in an ultraportable (or at least not in one that's not super expensive).
All that said, this should be cheaper since it's only an i3. Fab processes have improved and decent ultraportables are coming down in price from what they used to be.
i tend to agree with you i am a IBM Fanboy and love the X line i have 3 of them
but IBM built the X line from the ground up and developed a solid small notebook
i am afraid that all HP is doing is taking their existing netbook line and throwing in a HOT chip without the development (kind of like putting a V8 in a Pinto anyone remember those