Oh the MacRumor's parenting advice.... i knew it would go this way when i read the OP.
The OP didn't ask for parenting advice, he asked if the iPad would work for their needs that he outlined.
OP, for the needs you posted they would work fine. My daughter does most of that on hers, only using the desktop these days to transfer things to print. It replaced the dying 6 year old 12" iBook she used for school daily.... she uses the BT keyboard occasionally - we share it which i think you could do between the 3 of them at first too.
She hasn't encountered the "why do you have a big touch?" from her peers - most of them want their own. She travels in a different circle though, and they tend to be a bit less ruthless than your typical teen set.
I did remove the Netflix account password from her iPad though.... Buffy marathons wasn't i had in mind, homework was! Earned my "mean mom" hat that week (and she hasn't earned it back, in fact this weekend i have possession of the iPad itself for an unrelated reason).
I've been happy with it for meeting the needs we figured out she had - you might check with the kids if they haven't been part of the discussion and have them outline what they think they might need and make sure it works for them. We had talked about it for a few months, and she'd been using a Touch for school daily already.
But remember, you are the parent - so take all the above posters advice with a grain of salt
