The video the OP posted is utterly misleading. It's interlaced video (this is what causes the horrible flickering lines and stuttering on youtube). The ipad doesn't record interlaced video!
I can only guess it's one of two things:
1. This is fake, and the video isn't from an ipad at all, but a cheap HD video camera of some sort designed to work with a HDTV
2. It's been run through some kind of conversion program that's really messed up the video in a bad way. (Doesn't make much sense, as you can just upload the video directly! And why would you run the video through a converter that's obviously NOT designed for youtube or ipad, if you want to investigate video quality?)