To allow them to sell multiple generations simultaneously. iPods and computers when they bring out a new model they stop selling the old one. However, with iPhones we currently have the last three generations on sale. Much easier to describe you want an iPhone 4, than to try to qualify it other ways. There needs to be some way to differentiate them, and it wouldn't fit with Apple's aims to do it by specs.
While we don't have multiple iPad models out currently, the rumours seem to suggest we might in the next few weeks.