1. It's consistent with the iPhone.
2. It's not about being difficult to use, it's about being quicker. If my iPhone starts beeping while I'm in class I can mute the notification sounds without even taking it out of my purse with the mute switch.
3. No it doesn't. When the iPad came out there was no other way to do the rotation lock because multitasking wasnt available so they had to use the switch. But I'm thinking they always planned it to be the mute switch and that's why they changed it. The mute switch is still very needed if you're watching a video or listening to music and don't want notification sounds playing over it, particularly with AirPlay.
There are things that if you are using you always want there to be sound: music, videos, alarms (in the iPhone). Those things will still play sound with the switch on. Everything else (push notifications, email sounds, keyboard clicks) will be muted.
Now the reason why some games and video players still play sounds while others don't depend on how the developers coded them. If you want to be sure all sounds are muted you can just use the volume controls.
The main thing that makes the mute switch really needed (in my opinion) is for when you're watching a video or listening to music and don't want notification sounds playing over it. Particularly with AirPlay, where you might be playing something loud on a big sound system, the mute switch is really useful.