The iPad kills a lot of the reason for having paper.
(uhm, except once every 2 years when I renew my apt lease).
An article you want to go over, marking and adding notes (my wife does this sort of thing..)
A paper due to be submitted to someone who will mark & write notes and don't want to have to print it themselves?
Some reading material for locations where you don't want to take your $500 gadget?
Train: subway card; on-demand ticket dispenser at station. Even when I use the Acela I don't need to print anything.
Show: uhm, they should accept electronic display (then I'll use my iPhone - last concert was Kylie Minogue, and I got a paper ticket on the 2nd hand market)
Article: physical magazine or online reading. I never make notes on the physical article (then I'd have to have a filing system to keep it)
Paper: send it to me in PDF or some other open format; I'll send review notes back electronically.
Other reading material: books?
For some people it may be more convenient to print stuff, but not for me. Paper => physical clutter.
Apple's site does list a "iPad Camera Connection Kit" in the Accessory section of the "Tech Specs" page. It allows connecting with USB cameras. So the hardware is there. Who will make the software?