This is never going to take hold. I think last year it was the Galaxy Tab that was going to be subsidized by carriers and carry a data plan. That fell flat.
In an age where one can tether data from a phone to any other device and people already spending thousands of dollars over two years on a phone, they are not going to want another contract attached to an expensive data plan.
Very few customers are going to purchase a 10" tablet for $300 with a 2 year commitment when they already have a 2 year commitment and can buy a tablet today for $499 and never worry about it.
Not sure what you mean by "fell flat." I don't have any sales figures on the Galaxy Tab (not to be confused with the Galaxy Tab 10.1) but it's available on the Verizon Wireless website for $199 (with a 2 year contract) so I have to assume it's worth Verizon's effort to offer it. On the other hand, the Galaxy 10.1 even with a two year contract receives only a minimal discount compared to its full retail price. In other words, at least as far as Verizon is concerned, there is no heavily subsidized purchase option for a iPad competitive tablet.
Furthermore, your $499 example for an iPad is faulty. As far as tethering is concerned, that's not a free option for most consumers. (Please don't tell me about jailbreaking; it's not an option for the average consumer and carriers are cracking down on unauthorized tethering.) Tethering is not a month-to-month option; it's an extra $480 on a two year contract.
So that means if you're going to purchase a 16G iPad 2 (wifi only) for $499, it will actually cost you $860. A comparable "tetherable" Galaxy 10.1 will run you $700+$480 for a tethering plan on your smartphone. Of course, you can beat that price by purchasing a Galaxy 10.1 for about $500 from another source. But adding the tethering cost to a $500 Galaxy will only result in a price that's virtually the same as an iPad. Again, there is no heavily subsidized option for any premium tablet, iPad or otherwise.
Finally, all of this applies only to consumers with smartphones who have a tethering option, still a small minority of all consumers. Neither Verizon nor AT&T are having trouble selling premium priced 3G iPads with a month to month $30 data plan. It's no mystery that consumers will purchase an iPad when a competitor is unsubsidized. But knock off $200-$300 from the price of a comparable device with a comparable data plan and the picture may be different.
Of course, it may never be tried. Carriers may be unwilling to subsidize tablets so heavily unless they can assure a data-based revenue stream for two full years. Or Apple may well have an agreement with carriers that prevent them from doing so. (Though if that's true I'd suspect it may violate anti-competitive regulations if that's the case.)
Personally, the choices don't affect me one way or the other. I don't need a data plan with my iPad because I already have a mifi device from Verizon with a two year commitment. It gives me 4G connectivity for a variety of devices and a month-to-month option on a single device doesn't meet my needs.
Even if a comparable Android tablet was available at a substantial discount I would stick with the iPad for other reasons. But if I didn't need a wide choice of educational apps for kids (something that Android tablets don't offer) and a continuous data plan, I'd consider something like the Galaxy 10.1 or the forthcoming Lenovo ThinkPad Tablet, especially if it were priced several hundred dollars less than an iPad. I suspect I'm not alone.