It clearly is not confusing, as it is the same as every physical keyboard, and that is the point made in the parent. The claim is not "virtual keyboards should be identical to physical keyboards" any more than others are claiming "virtual keyboards should have nothing in common with physical keyboards".
Possibly shifting the case would be better, possibly not (is having the text jumping around helpful? Isn't the keyboard doing the minimal number of UI changes required to indicate what will happen? Does the international keyboard key literally print a globe?)
Having a keyboard that represents what your about to type is much friendlier - you can also see what character you get if you hold the key down with many Android keyboards.
Then we have the clusterfuck of the ,. keys, which show !? on them but if you hold them down you get '"
The iPad keyboard is far from perfect...
Using both an iPhone and a rooted Kindle, and being a computer user for approx. 18 years, I've got enough experience on the keyboard to know that a given key will always produce a lower case character unless caps is on or shift is pressed.
This is not a difficult concept, anyone with any kind of computer use in their background knows this intuitively.
The only difficulty comes in with telling if shift is engaged or not, due to the complete lack of tactile feedback. But this is more damning of all touchscreen devices, rather than just a certain fruit company.
It is a trade-off. I said that above. Personally I think a trivial concept that every computer user in the world is already used to has some value in staying the same. When I first used the Android keyboard I found it ugly and distracting, and not at all "easier". Exactly the kind of thing that Apple tends to hate. Note the absence of downvotes I give to people who don't agree :S
On a physical keyboard I hardly ever look at the keys as I type, when I want an uppercase character I'm generally performing two simultaneous actions - holding down shit and pressing the other key.
A touchscreen keyboard is much more of a visual experience, I tend to look at the keys I'm about to type rather than doing it by feel / knowing position.
The Android keyboard (on my phone) shows me what character I get if I hold down the key whereas with the iOS on I have to learn them.
I've been using QWERTY keyboard since Commodore Pets in school and ZX81 at home so it's not like I'm note used to a real keyboard!