Is it possible to setup an internal update server for iPads similar to the likes of OS X Server's update service (SUS)?
- Bandwidth concerns
- Do not want to jailbreak
- iOS updates
No - iOS devices do not apply for OTA updates from any update server in an analogous manner to Lion's SUS.
It is notable that Mountain Lion is announces to not ship with a SUS and instead have updates arrive from the Mac App store - so Macs are becoming more like iOS rather than the other way which seems to be the foundational premise of your question.