8Gb? This rumor sounds like a dud.
Flash storage has gotten cheap, and the iPad is a multi-media device and needs plenty of storage.
Only explanation that would make sense: Apple has an iPad2 overstock and will try to get rid of it rather cheaply. In order not to disgruntle anyone and to not mess with its high price policy, a ridiculous 8Gb would be in those sell-offs.
There is one other explanation that would make sense. Apple likes to have a lower priced solution around since that is the number that often gets tossed around in price comparisons, but at the same time they want it somewhat crippled to encourage people to get the newer one. Kind of like the iPhone 4 which was reduced to 8GB when the iPhone 4s came out.
However, as you say, flash memory is cheap and I really hope Apple doesn't do this. 8GB on an iPad will be frustrating for many users, and 8GB of flash memory is not that expensive (you can get 8GB SD cards on Amazon for less than $10, which means it would probably only amount to less than $5 on the BOM.
Besides, I expect Apple to start selling 1080p movies, and one or two of these would fill up an 8GB iPad.
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One of the major goals for iCloud, I think, is to enable its clients to become smaller, cheaper, lighter, and to enable them to have longer battery life. By offloading storage and processing to server farms. That means storing all your "stuff" in iCloud instead of in your individual iOS / OS X devices.
That's what "cloud computing" is all about. Client - server interoperability with internet connectivity. With benefits.
I think that this is a common misperception of what iCloud is all about. In my opinion, iCloud is all about making multiple devices (iPhone, wife's iPhone, iPad, Mac, etc.) all work seamlessly together.
iCloud's current implementation does very little to help with reducing storage needs. To use something, it needs to be on your device. Sure I can pull Apps or songs from the cloud, but if you delete an App, you lose all data associated with it, and when mobile, you can't download Apps bigger than 20MB. Even if you could, it would be too slow to be useful.
My 64GB iPad has about 30GB of Apps on it, 6GB of books, 4GB of photos, 10GB of video, 6GB of books, and 2GB of music. The music was more before I started using iTunes match, and if streaming was enabled, I could reduce this to zero. But iCloud won't help with books, photos, video, apps in the near future.