How many cute colorful touchscreens are there in NASA or Russian spacecraft? You need ruggedness and reliability. It's not an ipod, it's an incredibly powerful device, as is the computer terminal in Picard's office.
Yeah, but in the future, you would expect the military to have harder alloys and plastics than modern day iphones, too. There's the need for durability, but there's also the need for a simplistic interface in dangerous situations. Military- and construction-issued laptops, for example, can do everything a normal notebook can do and more, but they've got more padding and protection, and their interface is certainly sleeker than, say, a computer from the late 70s.
ANYway, my problem with PADDs wasn't about their size or appearance, but rather how they were used. Even 10 years ago, before the popularity of the Kindle, I was annoyed when the superstudious characters like Jake Sisko and Janeway would have piles of PADDs around, as if they were hard copy notebooks. A Kindle can store tons of information all by itself and it looks extremely primitive to the PADD, but the selling points of a PADD are:
1. easy access to information
2. efficient storage devices (the PADDs, or at least their predecessors, probably went a long way towards making a truly paperless work environment! How green!

)
But having piles and piles of PADDs around just looked sloppy and invalidated both points. There should be no need to have a library of PADDs (as opposed to libraries WITHIN them). Additionally, we see PADDs connected to a local network, say the ship's or the station's or the planet's network, which makes multiple PADDs even more superfluous. I realize there's a lot of info in galaxy 400 years from now, but Ensign Kim is no Lt. Cmdr. Data.