The problem with Jobs' answer is that Apple does not own any trademark on the word "pad." In fact, a quick check of Apple's Trademark List reveals only two trademarks with the word "pad" in them: iPad and MacPAD. This isn't the first app Apple's rejected for using the word "pad" in the name, either -- as Jesse Waites, the developer behind ContactPad found out last week. interestingly, a few developers I've talked to say that Apple does not seem to have a problem with people using the name "App name for iPad."
In spite of the fact that Apple does not own "pad," many developers may just decide to go ahead and change their app's name instead of facing a back and forth email argument with Apple and thus delaying their app's ability to be sold on the App Store.