I think most people that buy the smart COVER as a case are the ones who don't like it.
For me, it is the best iPad accessory yet. I preferred using my original iPad caseless, and it is the same with iPad 2. The cover allows me to have a small level of protection plus a stand without any extra bulk. I had the iPad 1 Apple case and did not like it at all, the flap always got in the way, it was annoying to put on and take off and whenever I set it up as a vertical stand my iPad would fall smack on its face.
The cover works extremely well as a stand in both orientations which is one of the main reasons why I like it. It also allows me to use the ipad without a case but still being able to put it down without getting scratches on the back (When using it on a table it is wrapped around the back, when not using it I put it face down. Using this method my iPad 2 still has no scratches on the back, which is much better than my iPad 1.
For me smart cover + a sleeve case is the perfect combo. Smart cover stays on all the time, sleeve case for when I put it in a bag or just take it with me.