I already pointed it out in the analysis of Apple iPad's industrial design, but I wanted to show you how stupid a widescreen iPad would look like.
From the original article:
The iPad has the proportions of a paper page. It's a familiar format, which feels natural to humans, especially in portrait mode. A widescreen in portrait mode feels wrong. We just played with a JooJoo - which is 16:9 - and that's exactly how it feels.
The 4:3 proportion fits non-video content really well, with no waste of space. So while the user may end up with black bars or cropped video, Apple may have traded full widescreen video in favour of a format that works better with non-video content and applications.