The 4S doesn't have the WiFi hardware that supports peer to peer WiFi (i.e. WiFi Direct), which is also why the 4S doesn't support AirDrop. This is why Apple requires both BlueTooth and WiFi be on for AirDrop.
The 4S will support Handoff since, as you wrote, it has Bluetooth 4.0. Handoff doesn't use peer to peer WiFi.
Handoff does however require Bluetooth 4.0, so it won't be on the iPad 2.
Ahh ok. Thanks for explaining it, knew it needed something else.