For me, bringing my iPad out and about, taking it out my bag and realising that I couldn't get online with it a lot of the time ruined the tablet experience.
Yep, agreed. A lot of apps use the GPS chip for location-based features, which is cool. I had a wifi iPad 1, too, and felt neutered. Ended up getting a 3G iPad 1 and then a 3G iPad 2 when it came out.