Do you have a case or protective film on the iPad? Try removing it and then taking a few pics.
Have you tried testing in other lighting condtions, like outside in the daytime?
You can also have a Genius compare it to another iPad or replace it.
I dont have any case or protective film on my Ipad yet. I have tried to take pictures in different light conditions but the result is the same.
I have reset it and based on apple call center agent recommendation I have upgraded it to the latest iOS. But nothing changed. It seems it is a HW problem. Tomorrow I will make a request from Apple support to replace my Ipad.
Thanks for your support.