Yes it's confusing and yes it's an issue of Honeycomb vs. Ice Cream Sandwich. Honeycomb tablets partition internal storage into a small application installation area and a general storage area. You can however install apps to the SD card if you wish.
With ICS that limit is gone, and so is the ability to install apps on SD cards. Overall, the ICS way is much better since you're not limited for app installation size. The Toshiba Excite 10, like the Transformer Prime allows you to use all available internal storage for app installation since it runs ICS.