First of all, it is not at all clear what would constitute success for an iPad ‘newspaper’. If it is to quickly reach profitability, which does seem unlikely, even with a projected doubling of the iPad universe to 15 million users in the next twelve months, the take-up rate for the subscription app would have to be astonishingly high for it to cover costs.
Murdoch like so many is caught between wanting revenues to reach the levels they have for packaged print products, and to retain some influence through publishing news products. The iPad is seen as being very appealing by the non-digital for a couple of reasons.
The first is that you surrender control only to Steve Jobs, not the rest of the internet. He is able to dictate what goes into the store and what is banned, he is able to exercise editorial control if he chooses in a way not even the most autocratic news agent would dare. This is a good reason for any news organization to remain highly sceptical of Apple.