Is the iPad for dumb people? Are automatic transmissions for dumb drivers? No, but you'll wish you had one in city traffic. That said, I'm glad I can drive a stick - even though I no longer own one.
I only drive manual transmissions, and I live in San Francisco - plenty of city traffic. The problem for me is that, if you know how to drive a manual well, you can't help noticing all the mistakes most automatics make (shifting at the wrong time, or into the wrong gear).
Most Apple products aren't like this. I ran nothing but Linux for nearly 10 years, but when I bought my first Powerbook, nearly everything was actually significantly better.
Apple's design philosophy for OS X and iPhone OS is different. OS X is not comparable to automatic transmission, it's a full *nix that lets you shoot yourself in the foot plenty of ways. iPhone OS is a different style.
The analogy with manual/automatic transmissions is quite interesting. There are some terrains/situations where a manual transmission is far superior to an automatic, but the majority of people will never experience them. So, the convenience of the automatic works great for most people.
The question I have with tablet computing is this: my computer usage is extremely multi-tasking - I have actually tried to pay some attention to this recently. I'll put the pasta to boil or something, and then I will hit the computer for 8 minutes. During those 8 minutes I might contribute to a few IM sessions, set off 4 or 5 tabs loading with the top HN stories and scan them, check my RSS feeds, check personal and work email and reply to anything that can be dealt quickly, check the state of my gentoo compile, tag some photos in digikam and set an upload to smugmug, and look up a recipe for tomorrow's dinner. The only reason I can do all that in 8 minutes is by aggressive keyboard shortcuts and desktop-switching.
I do have an iPhone and I do really like it, but it's not a multi-tasking device - not due to the OS, but due to the UI.
So the real question is - how rare am I in my computer usage? Am I analogous to the rare driver that tackles unpaved mountain roads, and so need my niche manual transmission while the rest of the world is happy with their automatics? Is the multi-tasking a geek thing, or do "regular" people do this?