i use my original iPad in bed every day. No problem sitting it on my chest, and holding it from there. I do wear glasses, so maybe I hold it a bit farther back than some. I haven't had any issues with it hitting my lip.
I also find that I can turn on my side, and use the rotation lock to view it while it sits on the bed, and I hold it with my hands.
I can't imagine selling your iPad because you can't get it to work in bed. I keep mine right next to my bed, and use it there about 90% of the time...
I either use it on my chest with a small pillow behind it using my shirt or blanket as a means to keep it from slipping. Or I use the rotation lock and use it while on my side also propped with a pillow. I have been using my iPad nude so I have no cases that I am currently using with it.
When I used my Vaja cases, I found them to be too wobbly when reading in bed.
I usually just prop my head on a couple pillows and rest my iPad horizontally on my chest/stomach and hold it with one or both hands, with my elbow(s) resting on the bed. This is the most comfortable for me.
My arthritis is really bad at the moment and I have trouble even holding a 150 grammes or so ebook reader. I have to hold the ipad with both hands, but I can't hold it for long, so it usually ends up on my lap. I do have a built in stand, but it's rarely working these days.
I have had the same challenge of getting it to stand up in bed like several posters here. The think that really bugged me was trying to use my smart cover to keep it vertical. Either it would fall over or the smart cover would fall off. I think it also depends on how sensitive your bed is to movement....i.e. bowling pins on bed while dropping the bowling ball. I use this guy.https://www.amazon.com/Arkon-Folding-Tablet-Stand-Android/dp/B000CKVOOY Someone needs to invent a heavy bean bag like holder that will mold to the slope of the bed and not be as sensitive to rolling over.
I seriously will throw all my apple products in the garbage and go live in the woods off wild berries before I watch myself mount something on the wall and watch stuff like above post. That actually hits a little too close to home!