Why does the iPad Air Smart Case not sit flush?

I bought one today and was immediately disappointed.
When the cover is closed the first 1/3 sections (closest to the hinge) is raised above the screen. When it's fully opened in 'reading' mode, the cover lumps up on the back of the iPad. This makes it uncomfortable to hold in the hand and it's strange this design decision was allowed to make it to a final product. Additionally, when in 'standing' mode for watching video, the folding stand has a tendency to fall on itself every now and then.
Why wasn't it designed so it lies flush in both open and closed mode? I've been using a cheaper 3rd party case for the last 6 months that was better designed. The only difference is the quality of materials. However if I'm paying $100 for an Apple case I expect perfect design, function and quality. It fails in the design and function department. The leather feels nice to touch, but it doesn't compensate for its flaws.
Reading through Apple forums and other review sites, it appears I'm not alone. I haven't made up my mind yet but I'm leaning towards a refund.

The stiffness of the leather hinge is probably what is causing this. I'm assuming that it will get better as time goes on and the leather "breaks-in" from use and becomes more flexible. You can possibly help it along by periodically creasing the hinge manually where it bends, like you'd crease a sheet of paper. You are by all means entitled to a refund so that's your choice & option as well.

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