You're making a common mistake by assuming that a person would buy an iPad (or anything) for one specific reason and that it must be the best possible option for that purpose. People don't actually work that way.
For instance, you say it doesn't replace a portable music player, but that is only going to dissuade people who are specifically looking to buy a portable music player that fits in their pocket, in which case Apple will gladly sell them one. To everyone else it is still a potentially positive feature.
Likewise for everything else. Each supposed failing only matters to a fraction of the potential audience, and then to a variable degree. The degree to which readability in direct sunlight matters to a person is a function of how much they intend to read in direct sunlight. I don't know about you, but most of my reading happens indoors, at night, by lamplight.
an interface so superior...every iPod since has stuck with it
Not true. The Shuffle and Touch models, along with the iPhone, have never had scroll wheel interfaces. The scroll wheel was an exclusive feature of the iPod, but it was not the singular force behind its success.
the iPhone had a killer feature - a mobile web browser that actually worked
The iPad has this same browser on a larger screen and with better performance. That alone is a fairly compelling feature for people who might otherwise buy a netbook primarily for web-browsing.
It doesn't support the codecs that 99% of the video files people view today are encoded with
Is there data to back up that claim? It seems a bit...exaggerated.
The iPad's limitations will only be known once people get their hands on them, but I think you can extrapolate from experience with the iPod Touch and Apple TV. All of Apple's devices are limited to MPEG4 in the mp4 container or h264 in mov, with strict limitations on resolution and bit rate. They don't support divx/xvid, avi, or mkv. Very, very few files are encoded under those restrictions unless they were created specifically for an Apple TV or iPod.
So, again, you don't actually have any data to back up that claim? Ok, that's my point. You're talking from your own experience with your video collection. That's fine, but you should understand that that may not always be a good indication of the demands of millions of other people. I strongly disagree with your estimation, but I likewise lack data, so I won't make any claims about percentages.
The iPad's limitations will only be known once people get their hands on them
The video codec support is listed on the tech specs page on Apple's site. A more exhaustive resource is Apple's developer site. This is not mysterious unknown information.
For instance, you say it doesn't replace a portable music player, but that is only going to dissuade people who are specifically looking to buy a portable music player that fits in their pocket, in which case Apple will gladly sell them one. To everyone else it is still a potentially positive feature.
Likewise for everything else. Each supposed failing only matters to a fraction of the potential audience, and then to a variable degree. The degree to which readability in direct sunlight matters to a person is a function of how much they intend to read in direct sunlight. I don't know about you, but most of my reading happens indoors, at night, by lamplight.
an interface so superior...every iPod since has stuck with it
Not true. The Shuffle and Touch models, along with the iPhone, have never had scroll wheel interfaces. The scroll wheel was an exclusive feature of the iPod, but it was not the singular force behind its success.
the iPhone had a killer feature - a mobile web browser that actually worked
The iPad has this same browser on a larger screen and with better performance. That alone is a fairly compelling feature for people who might otherwise buy a netbook primarily for web-browsing.
It doesn't support the codecs that 99% of the video files people view today are encoded with
Is there data to back up that claim? It seems a bit...exaggerated.