If the Ipad's screen is similar to the Iphone, I think readability will has the potential to be comparable to that of a chartplotter. I haven't had any readability concerns with my Iphone, and am using that as a basis for my opinion. If the Ipad screen is different I would be willing to concede the point though. I agree with the waterproofing concern, but the iphone is not waterproof and there are any number of waterproof cases available for it. I expect there will be plenty of suppliers for water-resistant Ipad cases in short order after its release.
I just read the 3G models are priced at around $650 which does indeed put them in the Garmin price-range, but the appeal, IMHO, is portability of the unit (maybe on the foredeck while someone else is steering in an anchorage for example). I'm sure there are better examples, I'm just not in a creative state of mind right now; but a Garmin is going to be fixed on a mount.
I know there are going to be drawbacks, but at $650 I think it's still a pretty cheap toy that has potential to be pretty useful.