That's a fair point. But in practice the target sizes on typical iPad apps aren't close to the lower limit of practicality, and the UIs of such apps are constrained more by not being ugly and confusing than by how many touch targets can fit on the screen.

Hence, e.g., all the speculation that Apple will produce an 8" tablet that's basically an iPad 2 scaled down somewhat, to have the same pixel size as the (old) iPhone -- whose target sizes don't seem to be too small.