I see WebMatrix as an entry level tool to get people who don’t necessary have a development background a quick way to build and customize websites (using the templates and editors) on the Microsoft platform. It lowers the barriers to entry because you have one lightweight tool (7MB + about 20 MB of dependencies) that can edit web pages and manage your SQL. If the user wants to do more than they will need to step up to the visual studio offerings like if they wanted debugging support. I think of it as a step up from Notepad :)
Not sure whether the express editions of Visual Studio were downloaded and used much as the site is a bit confusing with sightly too many product skus, and maybe this is why they made Web Matrix – to drive adoption of Microsoft Web technology for users who don’t want to pay.
Too many “Express” offerings http://www.microsoft.com/express/Downloads/
- Visual Basic 2010 Express
- Visual C# 2010 Express
- Visual C++ 2010 Express
- Visual Web Developer 2010 Express
- All - Offline Install ISO image file
- Windows Phone Developer Tools
- Microsoft Captions Language Interface Pack
Peter is right in that Microsoft tends to suffer from too many offerings (e.g. LINQ 2 SQL & EF, Microsoft Dynamics CRM/Great Plains/Axapta/Navision/SL) and a consolidation of the tools would make sense.