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Jobs clearly saw the iPad as the future of computing. It was the product he had spent his entire career working toward. His generation had dreamed of something like it for nearly 30 years. He would have been far more aggressive than post-Steve Apple has been in addressing the factors that are holding it back, such as an awkward file system and lack of a pointing device. These limitations are compounded now by higher prices. Jobs would have done whatever was necessary to have the iPad become the computing device of choice by now—both for consumption and for productivity. As it is, it is now mostly relegated to a pricey consumption device.
I love all things Apple, but they're out of their depth here. This is a massive overreaction akin to those who lie awake nights worrying that red light cameras are the first step to Big Brother taking over. What is needed is not an extreme, Snowden-like anti-government position, but a balancing test so both safety and privacy can be protected. That's how this will ultimately play out: Apple will lose this one and then legislation will strike the appropriate balance between safety and privacy.