I suspect that you are correct. How should I "expect" the iPad2 to be able to do more than the three basic transition choices the current iMovie for iOS to do when it has about the same processing power as my Mac of 10 years ago had when I was running the first version of Final Cut Pro. What was I thinking? I suppose this follows the mantra of "Be happy with what you get, because that's all you should EXPECT."
This note was created on my iPad2.