Apple wanted to raise the price of the iPad, I wouldn't put it beyond them to engineer this themselves. Human lives, especially workers, are not worth a penny in China or India.
It's freeking China, they do everything the cheapest way possible, this way you get things that go BOOM, just like in Japan. In China work is cheap, people would kill each other to get a job instead of killing their oppressors to be a free country.
The delays will make the ipad 2 highly sought after. There will be such a mystique surrounding it that every last Apple fan will absolutely have to buy one.