He's not wrong.
While some might post this video so we can point a finger and laugh, I'm sharing it because it shows just how much everything has changed in the past 10 years.
Almost all of what made the iPad possible was invented after this interview, and very little was invented just to be used in a tablet.
For example, the original iPad's price and battery life both came about as a result of the rise of netbooks. That was a market segment that didn't exist in 2003, so there was no way to foresee how it would drive manufacturers to improve battery life and reduce the cost of components and manufacturing.
The iPad also benefited from smartphones and the way they drove improvements in touchscreens. Again, that is a market that largely didn't exist in 2003, so there was no way to predict how smartphones would make onscreen keyboards possible.
Did you catch the part of the video when they discuss writing on a screen? That tells me that in 2003 they were assuming that you couldn't type on a touchscreens, which means you needed a physical keyboard. That matches with what I can recall from that era.
If you have the time, I recommend watching the entire interview. It is a window into a different era, a time when there was no MP3 market, no Youtube, and almost no mobile device market (compared to today, at least).
The above video shows us just how wrong we can be when trying to come up with a simple explanation for things like Jobs being wrong when he said that tablets would fail. He wasn't wrong in 2003, and it's not valid to say he was wrong based on trends which didn't happen until after he made the statement.