The camera idea is interesting. They also failed to attempt an iPod Touch competitor (though component prices could make that a non-starter). And there are at least two other arenas that remain insufficiently computerized: the living room, and the kitchen.
Put simply, HP had a tremendous opportunity, and they squandered it through lack of vision.
Looking at the quality of the HP TouchPad ads reminds me of the hilarous movie The Producers, where the show has to be a flop or it will financially destroy the movie makers. HP hired comedians to make fun of potential customers, like looking photos of buck-toothed relatives. Then there was the VP demonstrating the Touchpad without the camera getting a clear shot of how to operate it. Finally, shutting the show when it has barely started.
Put simply, HP had a tremendous opportunity, and they squandered it through lack of vision.