Its mainly because its not really pitched as a traditional handheld device. The size and pricing pitch it against ereaders, netbooks and windows 7 tablets. Its going up against the intel atom processor which is considerably more powerful and is going to be compared to the full functionality they can offer
Not to be rude, but how do you know how powerful the iPad processor is? It's developed in-house. It's certainly true that ARM processors as found in your typical mobile device are slower than the Atom processor found in a current netbook. It's also almost certainly true that the A4 is ARM-based.
On the other hand, it's not laboring under the need to run Windows. If you're comparing to a Windows 7 tablet, that matters. And so far, all the reviews say it's, well, fast. There's a nice one at
PC World, with video, including Need for Speed running on the iPad and looking way better than any game I've ever run on my netbook. Heck, you can watch video on it. Let me tell you how choppy Hulu is on my netbook...
It's already got a functional word processor and spreadsheet application. Character Builder is not exactly a huge load of complexity. That said, I don't expect to see CB on it because I don't expect WotC to do the port -- but it seems a bit silly to write it off for performance reasons given what we know about it already.
Edit: and yeah, what you said about apps actually existing. I mean, as much as I'd love to get fully indexed D&D ebooks, I don't expect I will. I would not get one of these purely for D&D; if I do get one, the nice iPlay4e and Compendium functionality is just gravy.