You can expect components to get smaller and smaller, but say that an IPAD that is make out of small components is going to make those components obsolete is just wrong. Did laptops do away with desktops? There is a strong base of people that like diy for the fact of saving money and the fun of it.
It MAY spark an interest in other real-OS UMPCs. The best solution for gaming is a 5-7" UMPC with windows on it that developers can use to develop good quality UMPC-based PC titles around these devices. This would allow far more developers into the market and would make it far easier to develop games.
But that will only replace mobile-consoles, and there are a lot of obstacles.
I know someone with a Viliv S5, I envy him when he plays the original Fallouts on it, the touch interface is very natural to the game.
Ipad is a useless toy, shouldn't even be called a Tablet PC as it's inferior to them. Only Apple fanboys and rich people interested in a fancy new toy are buying them.
Seriously, tablet pc's aren't new, and they've had little effect on the market. I think the keyboard/mouse are here to stay for some time, so are desktops. Yes even laptops have greatly cut into desktop marketshare, but many people are not happy with the small screen sizes in laptops. Computer I'm on right now is hooked up to a 32" HDTV, I use it for some games and watching movies, other desktop has 2 22" monitors hooked up. Tablet PC's, and laptops too, don't have a lot of use out side of portibility and internet browsing to me.
As for everything else, you already know it. It's a large, heavy iPhone that can't make calls. Everything the iPhone excels at, this excels at also, and that includes the acquisition of human grease and filth. Every extended interaction with the device leaves it coated with smears of unknown provenance, like a stripper pole. From a narrative perspective, they've gone the wrong way: they've made a large, less general purpose device after a smaller, perfect one. You come out with the big one first, and then when you make the one that fits in your pocket, there is a gasp from everyone in the room. You may sense this also, upon using it: the sense that time has begun to flow backward.