How about an apples to apples comparison?
What's the best tablet out there (or even announced) right now?
And how does the iPad stack up at this price?
You'd be comparing a quad-iPod touch (since the iPad is effectively that) against a real full blown computer which doesn't make it a fair comparison.
The iPad is no match for even a $250 Netbook in terms of actual computing usage at this precise moment in time. The Netbook does more, with more functionality, expandability, upgradability, real USB ports, potentially a larger higher resolution screen, etc...
Simple.
And yes I know you're comparing it to a Tablet PC, so... the 7+ year old Toshiba M205 Tablet PC I'm dictating this reply on (yes, dictating it) is more useful and powerful and capable than the iPad, and I paid $700 for it.