Portability is Everything
The desktop PC has been in decline for many years, even before anyone had ever heard of an iPad. Do a Google search for 'laptop vs desktop sales' and you'll find articles going back to 2003 which state that laptops are outselling desktops. Computer World ran an article in 2005 which proclaimed the end of the desktop, and some are saying that they could be obsolete by 2015 as advancements in tablet computers continue to develop.
What is it about desktops that have users abandoning them in droves? The answer is simply portability. There is very little need for a computer that can't be relocated, and about the only advantages of a desktop for a home user are slightly cheaper hardware and better gaming options. If you want a bigger monitor than what came on your laptop, just buy a bigger monitor and hook it up. The same goes for a mouse and keyboard, or even an external DVD/Blu-ray burner.
Wireless Internet access by way of WiFi has been around for many years and has helped to push desktops out of homes. You don't even need a traditional computer desk any more, much less a desktop PC. With a laptop, all you need is your coffee table, breakfast nook, anything horizontal just became a workspace. There is a huge market in stands for tablet devices, too. What's the point of having wireless Internet access in your home if you only use it from a stationary desktop computer?
Right now, ebooks are outselling paperbacks and MP3's outsell CD's. Video rental stores are going belly-up because of online streaming video services like Netflix and iTunes. Technology is moving us toward making everything instantly accessible anywhere, and desktop computers are a hindrance to that progression.