I too cannot deny that on the surface this cleaner had little of a role to play in the line up of Hoover cleaners, however I have seen more of them in my life time than I can shake a stick at. To my mind they were most certainly sold to the fastidious upright owner for whom a dustette simply would not suffice, given that the Hooverette could do just about everything which an upright couldn't.
I don't think price played a part in the choice to purchase a Hooverette over a similar priced cylinder as much as the mentality of the era would have - I mean someone who'd gone to the expense (and what an expense it would have been too) to purchase an upright machine would have to go a long, long way to justify the purchase of yet another 'full-size' cleaner, albeit a cylinder type. I think also for the price it sold for, the Hooverette seemed to do quite a lot more than the cheaper cylinders, as well as being a "Hoover" name - let us not forget that the very name Hoover carried a price all of it's own. The lack of power is of course a downside, but then it was probably sufficient for the tasks it was designed to do, and also the low wattage would have served to keep the cleaner in the lightweight category.
I once saw a Hooverette where the hose had been changed for a much longer one, and also there was an inclusion of an extra extension tube. I have no idea who did the alteration or where the parts came from, but it was clear to me by the scuffs on the underside of the machine and the wear to the small nozzele that it had been used as a cylinder cleaner in every sense at some point. It has to be said that the Hooverette does site quite neatly on the floor, unlike many a hand-held cleaner.
On the subject of low power and high dirt removal, one of my elderly neighbours (I say that as though we have mostly young ones; fact is we're all between 75 and death) bought the most grotesque bagless stick cleaner recently, from a Sunday newspaper, and I think it set her back all of £25 or thereabouts. It's horrendous and the suction redefines the word lousy, yet it has a small turbo-head with a roller that turns around (spins would be an exaggeration), yet this vacuum cleaner of hers is never empty of filth, I just don't know how it does it. This womans flat is spotless anyway, so where it finds it I don't know, but the fact that it does find and does move it astounds me.