Could you please add a setting where the keyboard (only the top row) becomes taller than it already is in "regular" mode? You could call this new setting "tall" mode.

I've attached mockups for both landscape and portrait.

Note: "Tall" mode in landscape actually looks like a full-sized keyboard, and only takes up a few extra pixels.

P.S. If you combine this with my comments in the suggestion entitled "Arrow Keys: ALL of them! ▲▼◄ ► ↑ ↓ ← →", you would get the Ultimate iPad keyboard!
e.g. look at the image: "5iPadlandscapetallwupdownkeys.png"