Re: "Is there something I'm missing here?"
"Both stalwarts are now in head-on competition with their customers, having launched their own-brand tablets, rather than the software for other people to make tablets."
Google's been doing this for years, I think their "customers" knew what to expect in the tablet space based on what happened in the mobile space... the only difference is they're selling it at-cost to try and give android a foothold in the tablet market. You also failed to note that it is one of their "customers" that is making it.. if it was a big deal, asus wouldn't have made it.. it's even got their logo on there.
As for surface, I think MS have done something fairly decent with it (if not a tad expensive).
"Amazingly, Google is actually competing with itself, as Google's new $12bn Motorola devices division wasn't involved in designing its new Nexus 7 tablet."
Again, not really that crazy, since they've only just bought motorola. Plus it only took them (asus) 4 months to spec/build the Nexus 7 when Google asked them to build a decent low end tablet at cost for the nexus brand.
"And if Google's own employees at Moto think they've had a kick in the teeth"
Which I assume they won't... since it's in their interest to get decent android products out to customers. If android was failing, google wouldn't have bought motorola in the first place. It also stopped them going under before google even begun sniffing around them, motorola was failing badly until they adopted android.
"imagine waking up as a Samsung planner today. You've bet big on Android and helped it become a huge platform - and Google rewards you with with a tablet that it sells at cost price."
They bet big on android because their software previously sucked (I know this from experience). Using android would have been cost effective... it's not because they were helping google out of the goodness of their heart like the picture you're painting, only to be stabbed in the back. I
"And each time, after 20 minutes, I've put it back in the box confident I'll never want to touch it again. Pricing issues seem irrelevant if they can't persuade me to use one for free."
The point is, you didn't go out and buy it to fill a need. Most people buying tablets will be filling some sort of need. Be that as a web browsing device, commuting device, ebook reader, media consumption, gaming platform. Which brings me to my next point...
"Without stuff to do, Tablets remain as the forgotten niche of computing - the Kindle and the iPad being the exception because of their close relationships with the content production sectors. And without content, neither Microsoft nor Google have much of a story."
Total bollocks. You can buy most music via a whole load of download apps on android and windows (amazon being one of them), just as easily as iOS. You can buy books via the kindle, kobo, sony, and a million other apps. Hell, they even have the same book/page whisper sync you get with the kindle. Netflix and Lovefilm have apps too. I don't see how Microsofts/Googles relationship with content providers is a problem when they have 3rd party applications for syncing this content for them.
"Microsoft has Xbox games. But neither YouTube nor Xbox access make a tablet indispensable. And "access to stuff" is simpler and easier on a Kindle or iPad than on either Surface or the Nexus 7."
Explain to me why access to stuff is simpler and easier on a kindle or iPad. It seems crazy to me that you even wrote that. The Nexus 7 isn't even out, but it'll sync books as well as a kindle... music/videos/pictures on my android phone syncs just as easily as my iPhone used to, if not a little better, because it'll sync down from the device too from 3rd party sellers in the app stores. Also, if I've plugged it into another PC, it won't wipe the device. The surface hasn't even been released yet, you've go no way of saying how easy that is to access anything either.
"Of the two losers, Microsoft's Surface looks a slightly cannier bet, because it's really a laptop - and you can still use it as a laptop replacement. Is there something I'm missing here?"
Again, both aren't even released yet - and you've already branded them both losers. I'm actually shocked at how poorly thought out and biased this non-article is, even for you this one is a bad one. :(