http://en.wikipedia.org/wiki/Windows_for_Pen_Computing
http://en.wikipedia.org/wiki/XP_Tablet_PC_Edition#Tablet_PC_...
http://en.wikipedia.org/wiki/Windows_for_Pen_Computing
http://en.wikipedia.org/wiki/XP_Tablet_PC_Edition#Tablet_PC_...
Sure, there wasn't a marketing hysteria around PDAs, but they were a viable market of their own.
Tablet laptops were used by many people as well.
Windows tablets used to be more expensive than laptops, and Apple tablets are significantly less expensive than laptops.
Windows CE PDAs were also very expensive, about three or four times what a current smartphone costs.
So the tech was there, but their pricing made the market very small.
Asus MyPal (a relatively high-end PDA) was around $400 when I bought it. That is cheaper than modern high-end phones and roughly equal to the prices of mid-level phones.
The laptop I'm writing this from costs around $400 dollars as well. This is the price of the cheapest iPad.