Depends on what you do... But based on iOS 4.3 numbers, 256 MB leaves only about 68-93 MB available for apps, so it definitely limits the size of the documents you can work with and how many complex Safari pages you can have open, while listening to music, etc.
As a general rule, I think it's a bad thing if the underlying OS overhead takes more memory than is left available for apps. With iOS 4.3 overhead at between 163 - 188 MB, the numbers are on the users side if the device has 512 MB. At only 256 MB, the OS is taking most of it.
it's not a full blown computer. it's a tablet you carry around for email, light work, data presentation from da cloud, and showing/consuming media
haven't you ever seen star trek? they all have computers in their offices and quarters, but they always carry around their padd's to read books, show status reports, light data entry, etc