syncing purchased music from iPad to iTunes 10 doesn't work

Hello,

On the iTunes features page it states:
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iTunes Store on iPhone, iPad, and iPod touch
Download music, movies, TV shows, audiobooks, and iTunes U content directly to your iPhone, iPad, or iPod touch. Just tap the iTunes icon to shop the iTunes Store via Wi-Fi on your iPod touch or via Wi-Fi and 3G on your iPhone or iPad.2 Browse the iTunes Store and get Genius recommendations for music, movies, and TV shows based on the ones you already own. When you get back to your computer, everything you bought syncs to your iTunes library. And if you’ve partially downloaded music or video to your device, iTunes completes the download automatically.
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but it doesn't work for me. I purchased an album from iTunes store via iPad and when I plug it in and do a sync the album contents are not sync'd back to the iTunes on my MacBook. I do not have "Sync Music" selected on the summary area of iTunes because I do it manually and it works fine from iTunes on MacBook to iPad (and iPod and iPhone). I just drag the songs or playlists that I want on the iPad to the iPad area and drop them and away they go.

Now I've got this album on the iPad that I can transfer to iTunes on MacBook.

My iTunes library is too large for the iPad. Selecting "Sync Music" will erase "All existing content on the iPad" presumably that includes the album that I already downloaded!?

What's the point of buying music on the iPad?? This is not the usual sound user oriented engineering that I would expect from Apple