Yikes. Well, at least this wasn't an incredibly troll thread.
There's no excuse for all caps, Facebook junkie (really? That entitles you to captastic typing?)
Anyway, if you take a look at the new iPod touch, the camera sucked in that. I don't know why they chose to do that, but they did. It was designed for video, HD video, but video only.
The iPhone, however, has an awesome camera for video and stills.
So if you look at the iPad, it is the spiritual successor of the iPod touch, not the iPhone.
Am I sad that it can't take better quality photos? Sure. But it's far from a deal breaker. I have my phone for that reason, or my camera.
As for the question of upgrading, what are you talking about? The quality of everything is far better on the iPad 2. Faster processor, double the ram, complete revamp of how the inner architecture works and operates with apps, webpages, etc.
Also, you've not seen iOS 5 which could take advantage of so many things you can't even imagine, having a dual core. Heck, you can mirror the display over HDMI. You can have 9 live video streams for Photobooth.
You can do fairly complex editing through iMovie on an iPad tablet!
How could you ask for anything more?
Yes, the display would be nice if it was better. Yes, it would be better if the gave us a gig of ram, but the display IS great and is still incredibly impressive. And the ram is actually very decent, specifically seeing as how iOS handles programs and their access of memory.
It's not perfect, but if I look at what's on the market, upgrading to the iPad 2 makes so bloody much sense, I'm thrilled to be able to do it and can't wait until I have one in my grubby lil' hands