However, I thought about it some more and came to the conclusion that Apple never intended it to be a laptop replacement of any kind. We need to look at what the actual competition is to categorize the Ipad and what it's target market is then consider it in that light.
Not quite the right way to look at this. You need not look at the competition. You need to step all the way back to "What is the problems/issues that people want to solve with the device". When you examine the dimensions of their problems you are a grounded problem definition. From there you put together a solution.
When you start by looking at everyone else's solutions first, you typically just end up with a variation on their solutions.
There is a slippery slope here. Don't want to re-invent the wheel. So should be familiar with other solutions. However, shouldn't be confined by them either.
The people who are in the "It has to be a laptop first and then sprinkle foo/bar/baz on top" are constraining the problem description; not the actual problem.
Most people tackle problems and use tools in a serial fashion. So a serial, flexible device will suffice for most of their needs. Flexible so that can deal with people having varying issues/problems they need to solve. Serial in that it keeps the interface less complicated.
Certainly they are playing to their strengths ( already had iPhoneOS lying around ... in fact probably was a by-product of pursuing this in the first place; just escaped the deep research labs first. ). It isn't a device that tries to cover everyone. For people who use computers in pedestrian fashion this will work.
I believe it's targeted towards the ebook market.
Not going to say that "consuming knowledge" was not a problem they looked at but there likely was no single target.
I think the Kindle DX is more so an easy target. Plus Apple, at this point, has an almost institutional fixation on primary colors. Just a Black&White vs. color debate will draw them in. LOL. This allows them to get out there and mix it up with someone. That way Apple can roll out the product and then incrementally fix it. And also allow other folks with software incrementally fix it too.
[ Apple will leave full frontal assaults at Windows to Mac OS X. That is a race to the majority they have already given up on. ]
To really make it good in a classroom environment, it needs to be able to multitask so that a student can have their textbook "open" as well as take notes on it.
Somewhat unclear question from public info as to how locked/etc Apple's book format is. It is based on an open standard but that standard doesn't exactly account for this kind of mark-up. So off in the non-so-standard woods at that point.
To take notes it needs a stylus and an app suited for writing notes.
Pads of paper don't typically come bundled with pens/pencils. That really isn't a blocker.
The one possible issue will be that the sensor resolution isn't high enough for the stylus point to be effective. I suspect it will work, but not for very fine grain work. Sketches so that you don't forget your idea... I suspect will work.