Different Products vs Configuration Options
...the product line itself has to be simple. The best page in the world can't make many similar objects seem not confusing. It's the reason there is not a 14" Macbook between the 13 and the 15. It's the reason there is not an iPhone mini or a double-high Mac Mini. It's the reason there's not an aluminum 15" Macbook Pro and a white plastic 15" Macbook.
I can promise you that the 6 iPad options are making Steve Jobs sweat, but they really had no choice there.
I agree the product line has to be simple, but there's a difference here. A 14" MacBook would have very nearly the same utility as a 13". A 7" iPad would have about 3-4x the screen area as an iPod Touch, making it a much better reader or browser choice, and far more portability and less weight than the current iPad. With the iPod/iPhone line Apple has used memory sizes as differentiators for price & model. Those are really just configuration options, similar to disk options on a computer. The MacBook 250GB, 320GB and 500GB aren't different models, just different configurations.
In the future I expect Apple will do the same with the iPad line (including the iPod Touch). Screen size (& 3G/4G) will determine models; storage will be a configuration option.
iPad Nano (current Touch), with 32, 64, 128GB options
iPad Mini (7") with 32, 64, 128 GB options
iPad (9.7") with 32, 64, 128GB options
Just 3 products (or 6 if 3G are considered models, not options).