This is exactly correct. My wife has an iPad since her computer died a week before they were released. Her old computer was by the couch and she mainly did email and Facebook while watching TV. For the price we were looking at a netbook or low end laptop, since there really wasn't a need for a full desktop system out there. The only game she plays is Bejeweled and we have my computer for more advanced tasks.
The iPad works perfectly for her. She's no longer stuck at the couch when she wants to be online and has more to do while exercising as well. She's got a decent sized screen to work with. Our toddler can actually play games on it (touchscreen instead of mouse works perfectly). Certain games and tasks are completely natural on it. I don't play RTS games, but I'd be willing to bet it's incredible for them.
I'm not an Apple zealot by any means. Hell, my AppleTV (purchased because my modded Xbox died) is running XBMC. The iPad is not for everyone and won't replace a primary computer, but it does definitely work great for some users.