My Surface replaced my laptop, and while I definitely had my issues with the transition (trackpad sucks so often use external mouse, aspect ratio is inconvenient for Office, display angle is limiting, and no built-in LTE), I've ultimately come to enjoy using it.
I've almost always got it with me, and I've found I've become nearly as productive on it as I was with my laptop. I've been willing to make the "nearly" tradeoff since I have it on me more often, so more opportunity to be productive, and I do use it as a tablet in ways that I obviously couldn't with my laptop.
The updates in the Gen 3 address nearly all of my gripes (why can't they integrate LTE??). I'm not sure if I'll pick up a 3, but only because my Gen 1 is less than 2 years old and still under warranty. If not a Gen 3, then a Gen 4 will definitely be on my shopping list.
I can't imagine I'll go back to a normal laptop. I guess I'm exactly who they are targeting.
I've started using the ArcTouch mouse with my surface when I'm out and about, rather than the touchpad on the cover. Works pretty nicely and folds flat. But then I've always preferred a proper mouse to a touchpad.
I suspect that enough of the people who want LTE have shareable (wirelessly or with wires) LTE modem with them at all times as to make the added cost of integrated LTE not a particularly effective selling point for the added cost (and very much not attractive for the base model, so it would necessitate added SKUs, as well.)
It's just frustrating to see that the Surface 2 (not pro) has integrated LTE as an option, but it's not available for the Pro line.