The display alone is well worth the price premium. The iPad is all about the display, all other features aside, it's 99% of how you use and interface it. It makes web fonts so much more readable without re-sizing.
Storage could be an issue for media music. You'll have to be strategic, but it's not the end of the world.
I have to be strategic with my 16GB iPhone. I build specific playlists and sync them. Currently have 5 plasylists, with 170 tracks, taking up 703 MB. I get bored of those, I swap out to a new playlist. I create new playlists every 6mo or so. Or a new playlist or two anytime I'm going to be travelling, and swap out a couple of old ones.
If you decide to go on a flight, and want some movies... it might start getting real tough.