I'm running a piece of software the requires a screen resolution of at least 1024 x 768. I was thinking about getting a netbook, but many of the netbooks I have looked at have a resolution of 1024 x 600. Why would they drop the below such a standard resolution?
Because Intel (until recently) restricted the size of the display that they would allow manufacturers to use with N-series Atom chips. This is the reason the Dell Mini 10, for example, uses a Z-series chip for the higher resolution version.
See here for an article that mentions this. I don't think Intel have publicly admitted this, and can't find a direct reference.
In order to make it fit in a small form factor and still get a resolution that is 1024 pixels wide (basically the new standard). And generally speaking people don't mind scrolling down, but hate scrolling sideways. So if the screen is shorter than usual, most people won't mind just scrolling down to display it, but making it wide enough to fit the most popular applications/websites is a must from a consumer-hapiness perspective.
I have a 10" 1366x768 netbook. The screen itself is ~150DP, and with Windows running at default DPI settings, small text is borderline too small to read if it's sitting on my knee. People with poor vision will have to hold it closer than normal or change the DPI setting in windows (at which point they might as well have bought a 1024x600 model anyway) resulting in a poorer user experience.
I like the higher resolution; but I'm not surprised that it has never been more than a tiny niche in the market. IIRC it's been several years since anyone has released a 10" model at that resolution. Although with Windows 8 requiring a minimum of 1024x768 to run and 1366x768 to run two metro apps side by size this might change in the future.