It is not always technical reasons that prevent an older iOS device from running a newer version of iOS. Apple can decide to allow the iPad1 to run iOS5 but not take advantage of all of the capabilities. Just like the 2G iPod Touch could run iOS 4 but didn't fully support the multitasking capabilities of iOS4 nor could you set a background image.Yes, but the iPad was then updated and sold with iOS 4.2 pre-installed.
iPad is the same hardware as the iPod touch 4G but with the A4 clocked faster. It should run iOS 5 just fine.
I think iOS 5 will see the end of support on all non-Apple-branded processor devices. So the 3G iPod touch and iPhone 3GS get the boot.