One thing I had heard speculated (I read a different article, not the one linked above) is that the specific FM transmitter or whatever specs are used could be used as a trigger to detonate a bomb. Isreal takes its security pretty seriously, so if there were any danger of this, I could totally understand their perspective. (Plus, they may have more ground security that uses these frequencies that we're used to in other countries, so it could be a matter of interference.) The counter argument to that is that some are saying the iPhone apparently contains the same specs (which I admit, I know nothing about) and so why ban simply the iPad and not the iPhone.

Of course, depending on how nefarious of an interpretation you want to jump to, the crazier speculations have included allegations of censorship and espionage (ie hacking into your machine while it's confiscated).