A couple of reasons:
1. Built-In keyboard/thumbboard - after using a Palm with a keyboard for over two years, going back to just using Graffiti (especially Graffiti 2) as input just wouldn't cut it. That tipped the scales between the Treo 600 and the (otherwise much better equipped) Tungsten T3
2. Size. It wasn't until I actually held a Treo in my hands that I realized just how small it is.
3. Merging of handheld computer and cellphone - just carrying one device beats carrying two.
And of course the Treo 600 has 24MB RAM free, as opposed to 11MB on the Sony NX60
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