I'm pretty sure this is because the iPad 3 is the bottleneck. Transfer from iPhone 5S to iPad Simulator on my MacBook Air for a 10 MB file was about 1 second. My theory is that only AirDrop enabled devices will get fast transfer speeds - http://en.wikipedia.org/wiki/AirDrop.
EDIT My assumption was wrong, transfer between two iPhone 5s is just as slow :(
EDIT Switched to streams API and it's much better
EDIT Tweaking wifi channel settings on my router has helped performance, but it still seems slower than it should be. 10 MB transfer now takes 30-60 seconds instead of 5 minutes.
EDIT I solved the problem by converting the images to JPEG2000 which is vastly smaller than PNG, even though the transfer is only like 100K a second it now finishes in a reasonable 5-10 seconds. See this stackoverflow answer: How do I convert UIImage to J2K (JPEG2000) in iOS?
EDIT Disabling encryption has also helped with transfer speed