This makes so much sense to me. There are (at least) 100 million iPads "out there" and Microsoft will make a killing on Office for iOS. I'm really curious to see how far down the rabbit hole they go with feature parity. It could be a slippery slope.
Regardless of the money Microsoft will make, I think this is also necessary to keep Office relevant. A lot of previously die-hard Office users picked up iPads already and are questioning previous assumptions about word processors. I've written about this before.