Yes, and assuming it had the very same feature-set as the "actual" office, that would turn the iPad into a much more useful device for many (myself included). Unfortunately, I doubt it will in fact be released in the short term, unless in a much more simplified version.

Whether MS takes the friendly or hostile approach to the iPad via Office, though, largely depends on the nr. of WinRT units they succeed in selling in the short term. If in high numbers to the point that the average customer start asking himself which way to go, Office as a concurrent driving force towards WinRT (=> increase in Apps and ecosystem) rather than iPad would make more sense. If WinRT is not as successful and the iPad stays the totally dominant device in the non-x86 tablet segment, probably Office on iPad will generate instead more profits.

I don't share at all your confidence in one outcome (or the other); especially at $199, it is well possible to see millions of WinRT sold in the (very) short term. That may change the scenario quite a bit, (and for the better, I would say, considering the hw and software quality of Surface and some other - Lenovo, for example - WinRT devices).

I think time will tell.