Yeah, App store would always give you the latest revision no matter what. Issues on the current version, were the erasing of user data you mentioned and an inability to make the update over wifi.
I have seen both Garageband and the Facebook app on a couple updates have an issue that the apps if downloaded over wifi but were buggy as hell and froze and crashed all over the place. Leave to Apple to corrupt a data stream simply because it isn't a local data transfer over a hard wire. It's the same zeros and ones.
I have iPad 1 and 3 and I can't repeat the bug on either. Off top I can't think of any major difference in the iPad 2 that would cause the bug.
Don't know if you downloaded over wifi or not, but I would delete the app on the iPad, delete the app/IPA file in iTunes, and re-download through iTunes and install through iTunes. And as always reset the iPad before launching the app for the first time.
I realize you may have done all that already, but it's so random a bug I don't know what to suggest other than "clean slating" the whole thing and hope you can't repeat the bug on re-install.