iOS has become an incredibly powerful platform. Many of the tasks that have traditionally been done with a regular laptop, can be done on iOS. Is it the same process? No, but it can usually be done. iOS was not only built for a mobile world, but it was also built for a world in which computers should be appliances. A refrigerator accomplishes its goal with relative little fuss. There are a few settings to mess with, but it's not where we would have the itch to tinker with it all day. It's meant to do its job and let us get back to whatever our jobs are. I want to break down what an average user probably does and see where iOS can and cannot handle the task.
Safari is the absolute best mobile browser. Its lack of flash support becomes less and less relevant by the week. There are no plugins to manage (I'm looking at you Java) or extensions to update. It just works.
Mail.app is a fully functional email client supporting POP3, IMAP, and Exchange. The App Store also offers various other third party clients.
Twitter and Facebook offer native apps for iOS that are continually being updated.
iTunes and Music.app solve this problem for most. Spotify and Rdio pick up the slack for those wanting a streaming service.
Netflix, Hulu, and Amazon have native apps, while iTunes is a great place to build a paid library thanks to Purchases in the Cloud. I'd rather have a service that was DRM free, but that doesn't seem like its in the cards anytime soon.
The App Store is absolutely chock full of great writings app. I'd recommend you search for Byword, IA Writer, or Elements for plaintext/markdown. Apple also offers Pages for word processing needs.
While feeling a bit long in the tooth, Keynote is as fully functional as its desktop sibling.
This is where 'iOS only' falls apart for me. I have 60GB of home videos/photos (and growing quickly). If it wasn't for this, I think I could stick with an iPad and an iPhone as my only computing devices. While services like Everpix are starting to become a somewhat viable alternative, I still like having a local copy of my most precious media. Perhaps combing some sort of local NAS drive with a service like Everpix could accomplish this goal. The workflow would need to be really simple,though. Everpix has a great automatic upload feature (location based). Perhaps I simply need to move to the 128 GB iPad. My only concern there is that how could I back it up? Apple would have to drastically increase the iCloud storage options.
iOS is clearly the way of the future. Every version is more powerful than the last. While Mac OS X is the world's most advanced desktop operating system, the world is clearly moving mobile.