The iPad works because it gives you a simpler way to do the simplest things you would otherwise do at your desk. It fits into your life quickly and effortlessly and it's priced to be a discretionary purchase. This is all essential for a new product category.
Microsoft thought that architects were going to pay probably over $1000 for this bizarre device to do work on it?? Highly trained people doing specialized work don't usually alter their workflow unless there is an obvious need and a proven solution. If they focussed the entire product on a single vertical then maybe they could sell a few. But an all-purpose creativity device with no 3rd party apps? That pie is in orbit.
EDIT: don't agree then?