Alright:
Yes, I too got a notice that the n800 was discontinued. It wouldn't surprise me, but then again, you can still buy new n770s, so I expect to see them for sale for a while now.

Saying "It's not designed to do X" is not an excuse for ITs. It is an excuse for iPhones.
Saying "It doesn't have the power to do X" is a legitimate excuse.
800 pixels wide is sufficient resolution for the screen size. I still await the day that web designers wake up and smell the CSS. I have problems with fixed-pixel web pages being too small on my desktop. For most sites, there is no reason why your layout should be so cluttered that you *need* more than 800 wide.

If you're putting a bigger screen in, you'll have to put in a bigger battery. At that point, you might as well go with an x86 processor and end up as a UMPC.

I don't think of it as a Swiss Army Knife. It's not a collection of tools watered down for portability. These tools gain power by being portable.