Top: iPad Center: Camera Bottom: MacBook
Mission Repair has posted images of what seems to be the iPad outer frame. Very similar pictures have been posted on other websites. Assuming these are actual iPad parts, it appears Apple did build in a space for a camera at the top of the device.
The photo above shows that the outer frame of the iPad has a spot perfectly sized for a iSight camera from a MacBook.
Apple decided not to ship the first generation iPad with a built-in-camera despite this evidence.
