It doesn't seem as if some people understand that Apple is APPLE and can price their iPads at whatever please because they are Apple.
Motorola is not Apple, period! Making the Xoom more expensive than the best iPad is not going to make people say, "Hey this Motorola Tablet is more expensive than the iPad, so it must be better."
Look how well the iPhone is doing on Verizon, it is not the best phone, in terms of hardware, on Verizon Wireless, but it will probably end up being the most popular.
If I follow some of the logic in this thread, the Droid Bionic should be priced at $350, that will make it more expensive than the iPhone, which, in turn, makes it better. That's all well and good if Motorola doesn't want to sell any.
People who want Apple will buy Apple a more expensive Motorola Xoom will not change that.