Lets cut to the chase - the market for tablets will always be smaller than phones. For many people, the phone will do enough, and for others they will have a laptop that the tablet can not completely replace.
But that's not really a problem - tablets are viable as long as they are profitable. They don't have to break sales records. And as they are essentially phones with larger screens and batteries, as long as you are producing phones as well, the marginal cost of developing tablets as well is relatively small.
Ultimately though, we're just doing the wrong thing comparing tablet sales with phone sales, just because they are considered "gadgets". The key difference is the way we purchase them.
So many phones are purchased on contract, with subsidized prices. People aren't faced with a high ticket price, and the contracts are encouraging us to change our phones every 12 - 24 months.
With tablets, we are generally paying that high ticket price, and the performance of the devices and complexity of apps are not increasing quickly enough to drive fast upgrades.
Tablets have a naturally lower sales rate than the devices we are comparing them to, and not making unrealistic sales expectations is not the death knell.
The biggest threat to the iPad may be the success - or lack of - the iPhone 7. Due to the nature of the ecosystems, we're far more likely to own a tablet with an OS that matches our phone, As long as we keep consuming iPhones, the iPad will still take it's share of the tablet market. If people move away from iPhones - maybe because of a possible headphone jack removal - then the tablet sales will likely drift away too.