Not arguing the popularity of Office, I like it on my PC and mac. In regard to assuming there's a high number using it, it's a flawed assumption. The sales figures you gave were for office 365 as a whole. There's no breakdown there. A high majority of that is going to be businesses, rather than personal, see I can make assumptions look factual just like you. Again, most people are talking about iPad, not overall, being as the thread is about the iPad app. When the numbers come in, then will see. Until then, I'm not going to assume one way or the other, unlike some people on here. Assuming that just because an app is top of the free chart means there's tons of people constantly using it is flat out absurd. Look at flappy bird, I guarantee you that not everyone who downloaded it is still playing it.
It's not a flawed assumption at all. There are a lot of people with iPads. There are apparently a lot of people using Office 365. The people who own iPads and the people who have an Office 365 subscription probably overlap a fair bit. How much, I can't say. But considering Word is currently the second most downloaded app on the App Store, and the 21st top grossing app, you can easily say it's decently popular.
And the disparity between top downloaded and top grossing isn't just a bunch of people going "bleh, subscription" then deleting it. There's two other groups of people you're not accounting for.
People who already had an Office 365 sub, and got the iPad apps the moment they came available. And people who are using the free apps simply to view documents.
The raw numbers of both the platform and the service point towards a decently healthy userbase.