"fully featured x86 PC in a tablet form"
Yes, the fully featured x86 PC in a tablet form. Something that 13 years have taught us repeatedly demand exists for only in a tiny niche, especially if you overprice the widget in question.
You're correct that it will never be "sold that cheaply", however, that isn't due to some innate value or demand for the device. It's simply because Microsoft herp derp market comprehension.
"It's Lamborghini, pay Lambo prices, bitch" works somewhat less well when you're fielding a 20-year-old rebuilt Lada powertrain crammed imperfectly into a Pontiac Firefly's body that happens to peel and crack when exposed to, well, air. It's doubly amusing when you realize the competition is selling a fuel-efficient Scion XB that does what people actually want, and does it cheaply even if it looks like a toaster.
In short: fuck x86 tablets. In the face. Sideways. With a giraffe. (Bet you thought I was going to say gorilla, eh?) The only reason why anyone uses x86 on the non-workstation endpoint any more is legacy software. Legacy software that requires a precision pointing device and an actual fucking keyboard. (No, the Surface keyboard doesn't count. It's somewhere between "Blackberry keyboard" and "netbook keyboard" and all the way towards "WTF useless.")
No matter how much flavour-aid that Microsoft pours into the local dihydrogen monoxide supply it won't change the fact that once technology reaches "good enough" people start buying on price...and we reached "good enough" a decade ago.
It's you're going to buy a smear-attracting fondle slab why in the name of sweet merciful monkey fuck would you shell out $800+ for it to get a device where 95% of the apps are either craptastic^n or designed for a precision pointer? Hell, why would you shell out $800+ for a device whose only real purpose is content consumption in the first place? What laboratory would they have to grow your ass in to think that was a grand vision?
If you're going to slap down more than pocket change on a computer then it had damned well better pay for itself. Which means being a productivity tool. Which means a precision pointing device and a keyboard that works better than rolling your face around into 80s voice rec software whilst making mewling noises and gasping.
The tablet is not a replacement for a PC! It is a replacement for the television and/or the newspaper. It is a new way to consume content, it is fucking worthless at producing it. If you pay $800+ for a single-viewer television or a newspaper you are exactly the kind of chump that companies like Microsoft hope we all are.
Which leads me to: there's no reason that x86 tablets shouldn't innately be priced at the same as ARM tablets excepting a complete misreading of the market by both Microsoft and Intel. They don't understand the purpose of the devices and they don't understand how to position themselves. If Microsoft and Intel can't start putting their x86 tablets in the $100-$300 range then x86 will simply lose out on the "personal content consumption device" market altogether.
Considering that historically we've had a lot more content consumers than producers I'd say that's a completely ridiculous business decision on their part.