Yes it will read and store RAW files on the iPad.
From what I've read, Apple capped the speed/power of the USB connection because they realised that people were using the USB adapter to do all kinds of things, such as use third party keyboards and such.
It's now supposed to be slower transferring photos, but they introduced the change back with the first iPad, so I've never see how much quicker it was.
I think it takes me about 15 mins to do an 8gb CF card full of RAWs.