The Ipad One had a year's run. One would have normally expected the two to be discontinued when the 3 came out but the Ipad 2 16 GB was continued as an entry level. Its been a good deal it appears to me.
I'm surprised by the screen flaws or scratches on the back. Mine was perfect out of the box the day the Ipad3s were delivered.
In addition I've been happy with my Ipad One for 2.5 years, my husband with his Ipad One for two years and accept they are going to become unable to be upgraded with new firmware but they continue to work just fine for most things as my husband doesn't feel the need yet to upgrade. I kept mine as a dedicated music device and moved to the three to handle my need for more speed, better screen for reading, graphics, photos and dealing with apps that demanded more of it. I'm a very longtime Windows user and do the same with my PCs when needed. Just the price one pays for using technology that continues to mature.