They already have! It's essentially what you wished for.

Below respectively 11 inch MBA vs NEO in cm

  - Height: 1.7 vs 1.27 (thickest point)
  - Width: 30 vs 29.75
  - Depth: 19.2 vs 20.65
  - Weight: 1.08 vs 1.23

But you get 1.4 inches extra in screen size due to slimmer bezels, double storage, double pixel density, double ram, almost double battery life and a LOT more CPU, for half the price (even before adjusting for inflation, leading to a further discount).

Only thing they didn't do was keep the taper model, but I think that's a smart move even if it made for a fantastic picture at the time.

The 13" MBA has the same approximate external dimensions as the 11" MBA. I know because it easily fits in the snug case that I've had ever since I got my 11" MBA.

They basically shrank the bezels down. If they made it smaller it would impact the keyboard size, which many people probably would not like.

Yup. The MBA11 is probably my favorite laptop of all time. It's my daily driver. I have 4 of those now, running MacOS and Linux Mint.

I was really hoping for the Neo to be more like the MBA11.

That or the 12" Retina MacBook, which weighed 0.67 lbs less than the neo and Air do. And it does make a difference!

It's disappointing they finally got the silicon for the "thin and light at all costs" form factor but gave up on the form factor. I just want my clipboard laptop back!

That would cannibalize their ipad lineup

That's basically what this is, no?