I think it is what you are comparing to. Technically if it works, then you just don't upgrade your apps and games and ibook and you will still have a working ipad. But if you feel inclined to get the new features, you would need to buy the new hardware.
Its not as robust as a laptop where you keep getting new OS updates, but definitely better than Android where you are left out in the cold after a year or so. Most windows 7 users didn't get the windows 8 update. So while we, as apple ipad users, are reliant on Apple giving us software updates, we are also ahead of the pack in mobile computing software support, compared to android and winmo.