I don't see it as an either/or proposition. Simply adding a filesystem to iOS would give users much more flexibility and power over how they use their devices. Would it be too complicated for the average tablet buyer? Maybe, but it's not necessary for Apple to put the iOS Finder front and center. I'm not talking about having iOS devices boot to a command prompt, I just want more control over files. Optimally, I'd like the power to use an iPad to log into any Mac on my local network, browse it, and retrieve the files I need. For example, if I'm reading a book on my iPad and see a reference to another book, I want to be able to access that book without getting up, booting my Mac Pro, and sending the epub into the cloud.
Loading all my PDFs, epubs, photos, and other assorted files into some cloud is not going to happen. I do not have access to unlimited bandwidth and will not in the forseeable future. The trend in America is towards faster connections with limited bandwidth caps, which is pretty much the worst possible setup for cloud storage.
Even with free bandwidth, we come back to iCloud's limitation of a flat file structure. There is no easy way to dump thousands of files into iCloud and maintain any sort of organization. It's not made for "active" users, rather it's made for people who just poke at their devices and do light surfing, maybe saving a file here and there.
