The ad doesn't show me how the device works, there's just a person talking and making promises. I guess the device's resolution and contrast are so low and it looks a bit underwhelming in general that they didn't go with that first...
Most people would not have thought "underwhelming", and displays no better than that were commonplace in really popular devices for the next five years, including in the Palm V and Vx.
The problem these early smartphones had with their audience was lack of precedent. The Newton launched the year before but almost nobody would have seen them in the wild. Maybe geeky people had seen the Tandy/Casio Zoomer in print ads or Radio Shack.
Devices of this kind that launched after people started seeing Palm Pilots everywhere had an easier time.
That, I think, is why it is sold the way it is in this ad; few people would have had any reason to know how they worked or what they could offer, so "features-first" advertising would not really have reached a wide enough market. This kind of advertising was really commonplace for computers.
This was a time when newspaper comic strips were still culturally influential because they were syndicated in newspapers across the US. Doonesbury spent several strips making fun of the Newton:
https://www.computerhistory.org/revolution/mobile-computing/...
You make a system that can do enough that you can teach users to meet it in the middle, and you don't pretend it is magic.
PalmOS and Graffiti in particular is a rare example of tech literally not pretending it is more magical than it actually is. It could do what it claimed, with high accuracy, you had to learn how to use it but it was not burdensome. And with the rest of the Palm Pilot, everyone knew they were carrying around a finely balanced device; useful enough, insane battery life, friendly.
One of the high water marks of tech culture in that decade.
"Eat up, Martha!"
/ob Simpsons
> and it looks a bit underwhelming in general
...only from today's perspective.