Bang for buck!
Simple as that;
Yes they are more portable, most people use them at home on their lap.
Yes they are thinner and lighter, most people use them at home on their lap.
Ooh they're so pretty, but you're paying £400-500 more for something thin, with an SSD, do the math!
Those spending in the £800+ bracket, usually want one of 3 things:
1. Ultra portable business machine, these have existed for many years prior to the Ultrabook and usually the company in question will have a deal setup with a supplier for one of their business systems.
2. Powerful, yet portable workstations, see 1.
3. Gamers, Ultrabooks don't have the performance in either CPU or Graphics for gaming and would rather spend the cash on the high end CPU and Graphics chipsets than just having it thin.
The only people interested in Ultrabooks are those intending to have something to show off, on the train/plane or in the Coffee shop.
Most of which probably have a Macbook of some form, they will probably be Apple Fanboi's and won't consider windows as an alternative.
Marketing strategy fail!