So, you have to open an app, manipulate the file & then send.

Sounds like some fancy finger ballet work going on to just to perform such a
simple task of sending a file attachment.
Doesn't sound efficient or easy for what the iPad was made for.... ease of use.

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I said I can't hit reply to an email and attach a file.
Now you claim I can but in reality, I must FIRST manipulate a file by opening an app, then some how reply to the original email and attach the file.
Also, these apps AREN'T FREE !
I must pay to attach files
First off, you can attach files from iBooks and the Photos apps, both of which are free. Second, the cost of apps like GoodReader and iAnnotate are pretty paltry for the deeper functionality they offer.
Finally, to your point that you can't attach a file to a reply. Yes, you are correct. Due to the app centric philosophy of iOS, there is no way yet to access files that another app is sitting on without going to that app first. This philosophy is certainly different than the standard PC OS philosophy (Mac, Windows, Linux), but that doesn't mean that it is inherently bad.
Consider the following two work flows in the two different settings:
First:
Fred sends me an email asking me to send him the XYZ123.pdf file.
On my iPad:
I exit Mail, launch GoodReader, navigate to the file and hit "Email file". I then fill in Fred's email address, type in a subject and a brief message.
On my Mac:
I hit reply, and type a brief message. Then I click on the "attach" button, navigate the file system to the file and select it.
Second:
Fred sends me an email with ABC789.pdf file attached to it, asking me to review and mark any comments or changes.
On my iPad:
I open the attachment in iAnnotate (or GoodReader). I read and markup the file. I hit "email file" and send it off, adding subject and message as needed.
On my Mac:
I open the attachment in Preview. I read and markup the file. I save the file to some appropriate folder. I switch to Mail and create a new email (or reply to Fred's original email), adding subject and message as needed. I click on the "attach" button, navigate the file system to the file and select it.
As you can see, neither process is truly all that arduous, and each has it's pros and cons. In the case of simply attaching a file, especially to a reply, yes, the Mac workflow is a little more efficient. In the case of being asked to markup a file and send it back, on the other hand, the iPad workflow is actually more efficient.
I expect that at some point Apple will create some sort of central file depository that could be used to attach files to emails created in the Mail app, quite possibly with that depository being located in iCloud, as opposed to on the device itself. I'm sure that they're just trying to work out a method that meets with their approval as far as having a really good user experience goes. Until then, there are, as you say, work arounds. And many of those work arounds, in my opinion, are much better than a poorly implemented filesystem would be...