It's a wonderful dream to imagine that someday we'll be able to scribble a mathematical equation and have it be instantly and flawlessly understood by the device. But we're just not quite there yet. It's a long road from recognizing a single simplified Chinese character to being able to interpret handwriting.
Just because we can't do this yet doesn't mean apple shouldn't include basic software for people to jot down notes with. It doesn't necessarily need to convert writing to text, it would still be a piece of software that lots of people would find useful, even if they (gasp) had to read their own handwriting. Additionally, if processing power is the major barrier to conversion, then the software could always be designed to just wait until the pad is idling before converting input to text.
I think this would be a very useful feature for people who wish to use this to take notes in class, at meetings, etc. Right now, the pad seems nigh on useless for this function. Say what you want about the keyboard; I think it will be very tricky to be able to type at a half-decent speed, and you definitely won't be able to input complex math equations.