No, the main reason that they are targeting the netbook is that Google wants everything to be web based. In Microsoft's ideal world, we all run high powered machines as our desktops (or laptops), running Microsoft thick client software that we all rush out to upgrade whenever the next edition rolls out. In Google's ideal world, we bring back the thin client. Our computers are just terminals to access the internet. Once on the web, we search google, use google mail, google docs, google everything so that they can sell billions and billions of little text ads. They wanted to address the shortcomings they saw in the browser, so they built Chrome. Now they want to finish the job and put all of our computing on the web.
The thing is, they aren't far off base. After playing with Chrome for a bit, I must say that I liked the speed and GUI better than Firefox. However, Firefox simply has too many add ons and other goodies I use day to day to switch (though it is possible that this has changed). IMHO, the speed was good, but not too much different than bare bones Firefox. Separate processes is a killer feature that Firefox should have added a long time ago (and will have soon; apparently an alpha of that feature was just released). Where Chrome really shines, to me, is the GUI. It is simple, clean, unobtrusive, and extremely smart. I held off trying Chrome for a while after reading their license, but tried it after they fixed it(http://www.pcworld.com/businesscenter/article/150637/google_amends_chrome_license_agreement_after_objections.html). Similarly, I would be really excited to see what kind of a UI they bolt on top of a Linux kernel.
Herein lies the issue for me: Google's products are top notch, but the idea of using them almost scares me from a privacy POV. Take Google Documents. By and large, I prefer to use the office suite (openoffice) on my desktop, but for certain projects and documents the "on-the-go" nature of Google Docs is awesome. Again, the GUI works well and the only real complaint I would have (privacy aside) is some of the odd layout issues I have seen on fairly simple documents when exporting. It seems obvious that Google uses HTML as its intermediary format, and then converts on import and export, so it is easy to see (as a programmer) how this goes awry. The idea of running important documents through Google Docs is kind of scary (most of my stuff in there isn't that important); but the open source alternative, OpenGoo (OpenGoo.org) is noticeably inferior, in terms of UI, import, and export. Sorry for the ramble. :)
No problem, it was all on-topic. I would take issue with your characterization of the netbook as it has been named (on the internet). It is clearly a general-purpose computer with no more relationship to, or dependence on the internet as any other PC. On my netbook I easily run all of MS office including visio plus some large java applications. It doesn't break a sweat. I don't play videos on it, the screen is too small anyway.
On the other hand I have never run any Google applications, not their toolbar or any network applications. I prefer to have all my data right here on my 8GB SDHC card which I can pop out for safekeeping or transfer. I have about 10k documents taking up 1.5GB. I certainly would not trust google to hold onto them for me, nor would I want their networked apps on windows. OTOH, I also run linux on the netbook mostly for casual surfing like this message. I have better control over power, faster and more flexible tools (e.g. PDF converters and text manipulation, etc). I can certainly see a value in what Google is proposing because I do it myself, but with one caveat, my linux netbook is still completely useful without being on the internet.