I think everybody was assuming: "There's no way they'll just release a big iPod touch." Nobody thought the formula for a successful tablet could be defined so simply.
Though it's not really, they introduced new controls and chromes which don't make sense on a phone's screen (but do on a tablet's) and the device to screen ratio is completely different.
It looks like a big ipod touch (which means people are rapidly familiar with it), but it feels very differently.
And of course, even if it were just a big ipod touch none of Apple's (potential) competitors in the field have such a platform.
different device entirely. - big screen is a big part of it, but the refined email application, and substantial improvement in speed is equally as relevant.