David Worthington:

The executives that assumed Bach’s responsibilities report directly to CEO Steve Ballmer, and Bach’s management layer was eliminated.

This re-org may or may not having anything to do with the iPad, and it really doesn’t matter. What does matter is that Allard is the guy you want to keep to fight the Android/WebOS/iPhoneOS devices. On top of that Ballmer is the one that needs to go, not the one that needs to start micromanaging the company.