Microsoft may have very modest goals and they may not want to add to the bottom line directly through Surface sales as much as make a statement. This would be similar to Google and Amazon who have ulterior motives for selling their devices (to get people into their ecosystem). While MS is in transition and may end up becoming more like Apple eventually, they are not Apple and do not rely primarily on hardware sales (which then also feed the Apple ecosystem).
MS doesn't need to directly compete with iPads or Apple but what they do need to do is make sure Windows (their bread and butter) doesn't become irrelevant in a post PC world running on mobile devices. If they can establish Windows as a player in both PC and mobile worlds then they are going to continue to be a dominating OS force. So I think it is relative to their over all goals. If they made 400,000 units and sold 400,000 units in two months then the sales are strong. Maybe they will eventually expand beyond their current constraints but this was not a mistake.
MS took a specific business approach and their choice was not to mass market the Surface devices. There are a variety of reasons that could have led them to this decision but just because they didn't put it on every retail shelf in America or around the world doesn't mean they are failing. Perhaps they could have sold more and will sell more if they do that but there is also nothing wrong with limiting their sales either. Assuming that the end game is to sell as many Surfaces as quickly as possible is a mistake many people are making in comparing MS and the Surface to other tablet retailers. For that matter Google wasn't the first to ship Android tablets and still has limitations on where you can buy its nexus devices.