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As the previous poster said, the current VGA front-cam is good enough for Facetime. While you can upgrade to about 1.2MP for the front camera, you need a lot of processing power to stream the 1.2MP stream via WiFi. In any case, the upgrade to 5MP was welcome. The 5MP sensor size and Apple's camera software is good enough for point and shoot. For those of us that use Skype a lot, the cameras are necessary. Skype is still better than Facetime right now just due to the compression codec they are using.
 
Thank you all for your thoughts...

I'm starting to think that one real reason (apart from not-so-nice reasons like wanting to sell it as new feature on the iPad 4) could be processing power. I notice for instance that when I use an HD webcam on my Macbook Air it is really working hard. The iPad has significantly less processing power, given also that it needs to use a lot of it to power the amazing display, so maybe Apple just opted against it as part of their usual strategy to not give the customers hardware they can't use in everyday situations? I suppose Thunderbolt would be a could counter-example to this argument...;-)

Also, when I do HD Skype with the Air, to get those data through my network requires me to be quite close to the Airport Extreme. It is not an experience I can enjoy while walking around in my house, etc.

Finally, a more crazy idea could be that they thought about the WHO's decision to classify cell phone radiation as class 2B carcinogenic. The EM field density around an iPad during an HD FaceTime/Skype chat must be at least as high as around a cell phone during a normal voice call.
 
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