I would never have known the option wouldn't come up until a Smart Cover has once been used on it. When I got my iPad 2, I immediately tried on the SmartCover before turning on the iPad 2.
Hope people don't mind me reviving this old post....
Is it safe to assume in order to get the "Smart Cover Unlock/Lock" switch under the "General" setting, you have to at least attach an Apple Smart Cover?
I have it missing in both of my new iPad (3) devices. One is straight out of the box and the other one had the backup of a previous iPad 1 restored.
In a local store today, I find the button is there for the new iPads.
However, if I attach a 3rd party cover which supports Automatic Sleep On/Off feature, it works though. What is bothering me is there is no way to turn it off. (assume even a 3rd cover can be disabled with that "Smart Cover Unlock/Lock" button)