Whilst the Xoom isn't great, I think quite a few of the next tablets launched like the ASUS Transformer will be much better. The same thing was said for the first Android smartphones and we all know how that is going. I think people will mainly buy the tablet that matches their phones OS with Android tablets outselling iPads once their product matures, much like their phones.
I have an iPad and can't to get a Transformer (HTC Desire HD user), it has better specs and is around $200 cheaper. The Xoom failed due to lackluster performance, high price and lack of SD card usage, I doubt many more manufacturers make the same mistakes going forward as Motorola has.