What do people use an iPad for? I think this isn't the entire question.
I would contend that the use case for a tablet alone is different than one for a tablet with a keyboard. Once you attach a keyboard, you leave the use case for a touch-based device and enter into, or at least overlap with, the use case for a laptop.
For a tablet without a keyboard, I use an iPad for content consumption only. I don't do anything requiring typing because, frankly, the soft keyboard still sucks. A real, physical keyboard changes the usage dynamics entirely. I can see how a pen makes a huge difference, too, but only for a narrow set of apps. But without a physical keyboard, I can't imagine doing spreadsheets or presentations or especially word processing. I'm a writer and using an iPad for that would be... well, highly counterproductive. Text-based apps or apps which require lots of alphanumeric input are tedious at best on a tablet without a keyboard. And once you realize that you really do need a keyboard to do what you want to do, why not get a laptop? And price is not really a strong factor in that decision. Productivity far outweighs it.
But for me, the iPad is truly magical for consuming media. I don't watch movies on it, but videos are great. Reading books is one of my main uses. I don't listen to music on that or any device, but I can see how it would be a good experience. Web browsing is great, except that it seems like there's less and less on the web that's actually worth reading these days. I think people who say they do computationally intensive work on a tablet are very few and most are probably kidding themselves that it's better than on a high-end laptop or desktop.
To each their own, of course. But for me, anything that requires a lot of textual input is not meant for tablets.