its not actually impossible for MS to sell it at a LOSS to them at $199 since thats what they did with the XBOX360 and look at where the XBOX360 stands now, top dog of the console world looking down on the PS3 and whatever mess Nintendo has
MS actually is pushing for WINDOWS 8 more than the Surface tablet itself, they need to get it out and the ball rolling to that the interest for the platform peaks for it to bloom and other manufacturer/partners make their own versions
the PRO has been said to be ULTRABOOK proce so expect that to be in the $700+ price range
the Nexus 7 is $199... with amazing hardware... as well as the Galaxy Tab 2 7.0 so how would the RT priced at $199 be impossible