I think in his mind he figured "It's a controller attached directly to the TV! No console required!" while completely neglecting the heavy cost of the iPad and its TV/HDMI connector. Also, I think it would be connected by wire, giving another edge to current consoles' wireless controllers.
I'm not convinced about the iPad as a major gaming platform, however casual games I can see working really well (as they already seem to be). I can't imagine the iPad would make a comfortable controller, especially since any touch-based controls will not have any tactile physical texture so I'll have to constantly keep my eyes on where I'm touching. Aside from that I don't think its battery power can handle extended gameplay with heavy graphics. Sure, you could just plug it in but you'd be tethered to both the TV and the power supply making it even more ridiculous. How to rectify that? Someone will inevitably suggest making a wireless controller for the iPad (or perhaps even using iPods as controllers) bringing us back to square 1, and maintaining the iPad's status as technically the most expensive gaming platform to date.