This is my thought:
If this iPad carries the browser profile of the iPhone OS, then this is a disaster. Many sites are programmed to offer a iPhone friendly "lite" version of their site and some don't give options to access the full version. So let's see, I am expected to pay $499 for a low memory wifi laced device that does not handle Netflix or browser based flash, when I can buy a HP Mini 311 with Windows 7, Webcam/mic, NVidia ION 1080p HD chipset and HDMI for connection to a HDTV all for $429 shipped? And if HP releases their Windows 7 "slate" device for $500 then Apple will take huge flack over that.
Yes I would buy an iPad with 32GB for $249 but the high price for what you get in the iPad is going to hurt it. If it was priced correctly then it would be ok.
I mean at least they could have placed a variant of OSX on there, for sure they could have slapped 10.1 on that equipment if Snow Leopard is too demanding for the device.
I have a feeling Apple has another version of this device with multitasking (software update maybe) and video iChat.
In fact I am willing to bet they have a fill fledge Mac waiting for a June introduction that delivers what everyone was looking for. I think they need to strategically get all the suckers (HP?) out of the way with copycat devices then they will crush everyone with the OSX tablet.
The iPad will evolve for sure, but early buyers are about to get dissed.