First of all, its cheap compared to a mac laptop or desktop. Secondly, it is great for surfing and checking emails, which is what my parents do 99% of the time on the computer. Any laptop or desktop would be an overkill for their use case. Thirdly, the iPad's zooming functionality is the best in the market now, and would be extremely useful for older folks with bad eyesight. The small screens on netbooks just do not cut it.
I think apple has again come up with a device that will revolutionize the way we use computers, just not the way all of us tech minded geeks wanted it to.