It was a rumor they were having production issues with this ipad. It was probably true but they went ahead with the launch.
Easiest way to sell a product like hotcakes. Release it, then say you're having production issues, people will line up. I often joke with my friend that we could come out with a new toy right before the holidays and it really wouldn't matter what it was...look at the beanie babies and zu zu pets, etc...
That said, Apple really only can make so much in a given amount of time. I'm sure they have production lines running full tilt. One problem is all the resellers lining people up and buying the stores out of stock. Once they get everyone stocked, then things will settle down. Once everyone who's fighting for one finally gets one in their hands and the resellers stop getting an arm and a leg on the secondary market....then they will stop lining up and things will resume to some normalcy.