One can mark up papers on an iLiad, but the price is out of reach for most teachers.
The screen is a bit small for the purpose, too. I'd say, maybe another 5 years. But most people probably won't want to spend enough for a large-screen device unless it can do more than read (and even annotate) text. And e ink displays aren't fast enough to do much else, even if color were available. Another hardware breakthrough is needed for a low-power, reflective screen capable of displaying motion and color, and yet another hardware breakthrough will probably be needed to bring the cost of stylus input down to affordable levels, before this kind of device will really take off.
I'm hoping that it won't be tied to Windows.
But so far, there's no good handwriting recognition software for Linux, and I'm not optimistic about Apple supporting such a platform. Maybe by the time the hardware is ready, there will be another OS to choose from.