Subsidized, maybe. Unlocked and unsubsidized, the iPhone 4 was upwards of $700 (for the lowest 16gb model) with 64gb models running upwards of $1,000. The most expensive model of 3Gs (64gb model) was $649 unlocked and unsubsidized upon its release.
iPads aren't subsidized by carriers, you pay the full retail price for it. It is very likely that adding a display of that resolution will drive the cost up $100 or more. Neither consumers nor Apple want that.
Besides, with the iPhone 4's "retina" display, Apple was only catching up to competition, since the resolution on the 3Gs was painfully archaic 320x480 HVGA, vs competition's obviously superior 480x800 WVGA.