Microsoft’s people not only conceived the idea of building a tablet using a chipset – ARM - that the huge majority of existing Windows software could not work on
The hardware wasn't the problem, the artificial restriction on using existing apps was. Some kind of support for x86 binaries would have made the whole thing a very different value proposition by protecting users' investment in software and also providing a clear upgrade path to Surface Pro: existing apps low power apps would work on RT but if you need more power then you could continue using the same apps on a Pro or a notebook. By castrating the software Microsoft also made interesting hardware innovations like the keyboards irrelevant. The strategy was also a double punch to OEMs: not only was Microsoft competing with them directly, it also prevented them from adding value and differentiation with possibly hardware accelerated support for x86.
Because Microsoft persisted in using the name Windows for this it created a different expectation than Apple did with its separation of IOS and Mac OS - even if technically there are little differences between many IOS apps and their Mac OS pendants.
So the market looked like this:
Entry level: cheap Androids which run the many of the same apps that people have on their phones, limited performance but for less than € 250 the risk is low and they're great media players. Very well suited to use in the home.
Medium: I-Pad Mini, branded Android. Access to established eco-systems, excellent battery life making them suitable to be taken everywhere. Great second devices.
Premium: I-Pad, Samsung Note 10 - dedicated devices with clear USPs and eco-systems and usable for real work.
It's really difficult to see where the RT fits in there: it doesn't protect any existing investment, offers no upgrade path and is too expensive for occasional use.