I like the theory that the iPad CPU is not an ARM copy, but much more powerful, running an ARM emulator. 

Forcing developers to Object C is a way to insulate them from the coming native CPU instruction set unveiling and swap over. This is just what they did with the switch to Intel. 

However, with Squeak's open VM, and independence of from any native UI, it's much easier to port Squeak and its derivatives to a new CPU than for any other applications out there. Yet, it might be swept up with the rest as "too buggy to port or support".

Nevertheless, if Apple came out with an "eduPad" for the DIY group, with a separate EduAppStore using a different developer licensing agreement where they don't guarantee app quality (and an extra fee for filtering the nasty from kids), they might sell half again more iPads ... to the kids so that they don't use their parents' "perfect pads" and sell more to schools. The EduAppStore purchases and app installation would be controlled by the parentPad and/or the school district. This could be done with almost no more overhead for Apple. And then, when the kids break their pads, as they always do, Apple sells more. ;-)

Cheers,
Darius