The Tab got some good reviews, some people comparing it favourably with the iPad. And they did rejigger some of the included apps for the bigger screen. Most of the negative chatter seems somewhat
ideological, what with it apparently having the "wrong" size or "wrong" OS rather than any specific issues caused by these decisions. Even if this return rate applies across the globe they've sold more than I would have expected.
Since people repeatedly harp on the price, which has always been the same or less than the iPad+3G I'm guessing that the continued lack of a Wi-Fi only model is the real bone of contention (and/or the fact that tablets in general are too expensive for most folk, even/especially those who've already spent thousands on a slightly smaller, data-connected touchscreen slab that they carry as a phone).
I'm guessing the lack of Wi-Fi only was the (unforseen?) consequence of Google's restrictions on device capabilities which meant you needed a 3G radio and phone capabilities to get access to the Market. Google is supposed to have relaxed these and a Wi-Fi only model has been teased, though whether that will be eclipsed by the 2nd gen or not is a matter of timing.