jskopek covers a lot of it - it was a little too heavy, a little too bulky, a little too unresponsive, that you just didn't want to carry it around everywhere - and without having it on you, you'd never really get to use it.
It also took quite a long time for most apps you'd care about to release iPad-compatible updates, by which time the iPad 2 was out and was lighter, smaller, and much faster.
The browsing experience was particularly painful on iPad 1 - loading things took a long time, and the new, bigger screen practically begged for multi-tab browsing, except there's not enough RAM to hold even two tabs at once, so switching tabs was just constant reloads. Lots of little things that aren't huge problems by themselves, but contributed to not using the device.