This article didn't get the prices right (which is suprising since that was the sole point of the article), and it got the history exactly backward.
The main shock people had about the ipad was how expensive it was priced ($500-$750). They weren't 'surprised' at how low it was priced. And to Apple's credit, we now know that even at that price it would sell well, and also we know that this price is actually not so unreasonable or inflated as we thought, because other major manufacturers making comparable quality tablet products are also in that price range (except for the nook color, notion ink adam, archos 101 and 70, or several no-name tablets).
Also, the xoom is $600 compared to the old ipad's price of $500. If you want to compare the $800 xoom with 3g (and 4g), compare it with the $750 ipad with 3g. So the prices are not so different.