This message can occur when TATSU (Apple Code Signing Server) declines the request, doesn’t respond or can’t be reached. In previous versions of iTunes I believe the equivalent message was “This device isn’t eligible for the requested build”, which was displayed when an incorrect version IPSW was used, or Apple has stopped signing the version of iOS that iTunes is attempting to restore to.
I’ve seen this happen when the restoring computer is running an older version of iTunes, and has downloaded an older iOS version IPSW as a result. I’ve also come across it in cases where the hosts file (/etc/hosts) has been modified to prevent connections to Apple’s code signing server (gs.apple.com).
Install the latest version of iTunes if you haven’t already, delete or move any older IPSW images on the system (stored in ~/Library/iTunes/iPhone Software Updates or iPad Software Updates) and attempt to restore. Also check the hosts file at /etc/hosts for any unusual entries. If that doesn’t work, I try another machine and sometimes another internet connection as a last ditch effort.
I don’t believe it’s an issue with the iPad itself, but this isn’t a message I’ve seen often either, so I can’t be one hundred percent sure.