I've not yet seen a netbook for $1200, but probably just because I'm not looking too closely.
My puzzlement is that they're still using Core2 a couple years after everybody else and his dog switched to i3/5/7 and Atom. Surely there are i5 ULV processors available??
On a C2D system they can use NVIDIA's chipset with an Integrated Graphics chipset
For I3/5/7 they'd need to use an Intel chipset with a discrete GPU from what I understand, and there isn't much space in the air.
If Intel could pull their head out of their asses, and allow NVIDIA to produce chipsets for the latest processors I think you'd find that the air would be more with the times.