To be honest, I completely disagree. The whole benefit of a high PPI screen is that you have trouble seeing individual pixels - Things look "smooth" vs "chunky".
I have a ~100ppi 23" desktop screen(1920x1080), and at a distance of 18" or so, I can see individual pixels clearly; a single pixel out of place on a font looks bad, and if something's spaced slightly off its easily noticeable.
My N900 is even better - I really have to strain to see individual pixels, and AA on games isn't even really required for it to appear sharp and clear; On my desktop screen, 4XAA is required for a game to look good. On my laptop, 2X is sort of required.
So, in conclusion, I completely disagree, and don't think you know what you know what you are talking about.
I think the pitfall here is how this particular feature is 'classed'. When you say something is 'necessary' or not, then you get very2 subjective. ie: Is it a necessity for anyone here to own a 7 or 10" internet tablet?
Generally I agree. But the distance can vary a lot and there's one more element here that I think is crucial, which was the saving grace of past iPhone\Touch's low ppi screens: - Zoom capability of the OS. (How fast, how easy, how available)
Yes, because you're comparing a 4:3 screen with a 16:9 screen. It's not a direct ppi comparison, you're unnecessarily introducing another element in this comparison.
@VGA on 5": Subjective. People may mistake this to you having less sensitivity to high quality picture or having low standards.
iPad's resolution is not bad, but I am quite certain Jobs will put retina-class display on the next one. I certainly could use a higher ppi on the iPad when reading publications (ie: zinio) on it.
Now, to address the rest of your post, it is all based on a flawed assumption about viewing distance. I can tell you that I typically hold my N900 between 10-20 cm from my face; while I may struggle to see individual pixels at 20 cm, I can see them at 10, therefore >220 PPI clearly isn't too much since the N900 has 266 PPI and I can still see individual pixels.
At one point in your post you make the assumption that a 10" tablet would be used at 50cm, I don't have my netbook screen that far away when I'm actually using it (unless I'm watching video), so why on earth would I stretch my arm to hold a tablet at that distance. For a tablet computer, if the resolution is so high I can't see the detail I can bring it closer to my face, there is a point where increased resolution will be superfluous and it does depend on viewing distance, however most devices these days (generally excepting TVs) don't come close.