In no particular order...my thoughts:
1)I'm sure MS is waiting to see if the iPad is even remotely successful for MS to re-code MS Office for the iPad
2)I, an Excel, Word, and PPT user, wouldn't see much value for CREATING MS documents on an iPad. Sure, writing a very simple Word doc or a simple PPT...sure. But to actually create lovely documents, my fingers have far less control and accuracy than a mouse (margins, highlighting, etc) as well as using keyboard shortcuts (copy, paste, bold, italics, etc).
3)Building on #2, I would say there IS a market for people who simply want to READ an Excel or Word or PPT doc.
4)Remember, you can't print on the iPad...so that's a big problem for document creators and readers...a lot of us just like to see our finished work in paper so we can mark it up in pencil or whatever.
5)I would think MS would likely create some type of Free Reader like they already do (and have done for 10+ years) for their docs.
6)I'm sure there are plenty of iPad apps (already built in maybe) that can read a lot of MS docs.
7)As more MS Office docs get saved in non-MS-Office proprietary formats (the .DOC extension for example) the more their docs will be open-standardized and read by lots of stuff.
8)There are already numerous apps (paid and free) in the Windows world that can read and create MS docs (OpenOffice is one...and it's free)...so I would think MS might let someone else come along and do all the work
9)What is MS really going to charge for said apps? They can't sell Word for $10 when a)Word sells for about $75 on the street for Windows (at least it used to be unbundled...not sure about any more) b)Apple is selling apps for $10 (so lot of competition there...and might I say Apple has the upperhand on promoting its apps) and c)how much money and time is it going to take to create said MS Office iPad apps...what's the profit looking like for MS?
10)Although MS Office reigns supreme in the world, the consumers utilize about 10% of it's power. Business users are the ones that truly get their money's worth from MS Office.
Remember also that the iPad is geared towards consumers...not businesses. A VERY small percentage of people I know, need Office installed on their computer for personal use. Most downloaded docs are in PDF format. And when they need to open a Word or Excel doc, there are MS free viewers or free software...or they buy Office for $129. I would say 10% of all my friends and family have Office loaded on their computers....because they're just not getting Office docs for personal use. The 10% that are?...they have kids that write papers and got sucked into buying the entire suite instead of just Word.
-Eric