This is likely to change in the next generation though. Currently the sub-$500 tablets are pretty poor but cheap Tegra 3 devices are going to be good enough for a lot of people.
This was said about every previous generation of Android tablet. The problem is Apple's execution has been flawless: price, performance, delivery dates, supply, apps, and marketing.
A lot of people are assuming things will play out the way they did in the 80s. Like Apple didn't learn anything. They realize developers, price, supply all those things matter. Which is why I don't believe 2012 will be anything like 1984.
The first generation of Android phones was terrible too.
What I hope and expect to happen is that in the next year or two we see real competition in the tablet market. Apple is likely to stay on top at least in the near future but I predict lower cost Android tablets are going to start to exert real pressure on them soon.
There's only been one generation of Android tablets that's played out and they all came with Honeycomb with Tegra 2's. Even Google admitted that HC was a thrown together hack so its not surprising that the devices weren't particularly competitive. The upcoming Tegra 3 devices is the second generation.
They were preceded by a generation of single-core Android 2.x tablets, which were terrible. And that includes the original Galaxy Tab that was sufficiently Google-supported to get access to all the proprietary Google apps and the Marketplace.
The best devices of the Honeycomb generation are pretty compelling, especially after getting an upgrade to ICS.
The only Google sanctioned "tablet" from that time was as you mention the Galaxy Tab. The only reason it had the market was because it was essentially a big phone. In Europe, you even pop a sim in it and make calls out of the box. However, the others were not sanctioned thus hardly qualifying as a "generation" and even the Galaxy Tab was discouraged by various people involved in Android development.
