If the Mac was "The Computer for the rest of us", the iPad is meant to be "the second-computer for the rest of us". It's not meant to replace your main computer, it's for using whole sitting on the sofa watching TV, it's for prodding at the kitchen table over breakfast, it's for keeping the kids quiet in the back of the car. It's probably best not to think of it as a "computer" at all, it's more akin to a portable games console, except more targeted at web applications and media consumption (hence the larger screen).
If you already use a laptop for those sort of things (and I do), it's probably not a device you'd see the point in.
Where Apple may manage to make this work is via good licensing with content providers. They demo'd the NYT paper, which was a bit dull. If they manage to pull off some sort of license with Disney (where Jobs sits on the board) for exclusive content, imagine the situation in the playground where all sorts of content is only available to those with an iPad.
Actually, overall, I think Apple would do best to push these at kids. The touchscreen provides a simple UI that even an infant could use, it's a locked down platform, there's lots of potential for education and entertainment apps.