> not a single novelist has realized that such a singularity would almost surely be preceded by a world in which machines are 0.01% intelligent (say), and in which millions of real people would be able to interact with them freely at essentially no cost.

Aren't Asimov's Multivac stories basicaly this? Humans build a powerful computer with a conversational interface helping them doing all kind of science and stuff, then before they know they become Multivac's pets.