Yeah - it's a big iPod. yawn As an instant-on, full-page web browser, it's far more useful than a netbook, but it's pretty underwhelming for everything else. With shorter battery life, greater cost, and more eyestrain than the Kindle, I doubt it will have much impact on the e-reader market.
How many do you think are going to look at the Kindle at $250-500 and then the iPad at $500 and choose the single-purpose-does-one-thing-somewhat-better device? If Amazon dropped the price to sub-$100, I think they'd sell them by the boatload, but at current price points... nah.
Like I said, it's a fine netbook killer (though I think the segment was killing itself). But there is no way this thing is taking market share from the e-books.