IPad is already in its N-th iteration. What was Microsoft thinking that it could pitch an alpha/beta product against Apple's mature product head-to-head?

Pricing it low initially gives value to the users and they would be more forgiving of its shortcomings. It at least creates market share and momentum.

Priced it high initially and then low it is the worse marketing approach. The initial high price kills market penetration, and the subsequent price slash creates a sense of desperation and signals something is wrong with the product.