Normally I'd agree with you and it peeves me to see inventions dismissed by people who have only given the matter ten seconds of thought as opposed to the years of thought given by the designers.
But in this case (and the case of the Magic Mouse) I'm at a loss. They aren't dummies, and I'm not saying I'm smarter then they are but this is just awful. I thought that the instant I saw it, and I've given it a lot of thought since. That's because I really want one of these things, but I can't allow myself to spend that kind of money (a) playing Tim Cook's Annoying Storage Game, and (b) having something so badly designed it insults my intelligence.
My only theory is that there's some ill-functioning management at work. Possibly Sir Jony's obsession with making every device as thin and featureless as an OSX update, is being allowed to trump utility and user experience, since there seems to be nobody with a strong enough opinion to keep matters in balance. That's pure theory, but it allows everyone to be talented/smart/inspired while still collectively making terrible mistakes.