xda-developers.
I suspect you may have a bad wifi chip in your tablet? Have you try to hook it up to a different router or mobile hotspot?

Thanks guys, I just checked and there was an improvement in the speed. Nexus 4 as the wifi hotspot,  4XHD and TN7 connected to it. I just transferred a video from 4XHD to TN7 and i could get 850 Kbps download speeds (since upload speed on 4XHD was 850 kbps). I have a Belkin n150 wireless modem router and Asus rt n65u wireless router. Seems TN7 is having interference issues with Belkin, not sure why. I am using it as a modem only and i feed that to Asus via WAN port. 
 
Any other device that i have used before has never experienced this problem. Could be a SW issue. Anyways, I will check at my friends place. 

FINALLY!!! found the solution. changed the wireless settings in my Asus router. it was in "b/g/n mixed" wireless mode. changed it to "n only" mode and it is working flawlessly. thanks a lot for the help guys!!! am sure ppl experiencing similar issues can try this and see. Not sure why there was a problem in the first place.

Solution regarding the issue with the wifi not connecting after sleep (Asus routers)
"DTIM" setting under Wireless settings. To get to the setting go to:

Advanced > Wireless > Professional > DTIM Interval

If this interval is set to a higher value then you may experience some delay before being able to connect to and use the wireless network.

paulLubos
Well I just bought 3 Tegra Note 7 for a project at our university. Unfortunately, one of them has Wifi issues. As in: It says "turning wi-fi on" and that's it. Nothing happens. The other 2 instantly found the wifi networks.
 
Factory reset and some soft and hard reboots didn't help. Unfortunately, I can't install the System Updates (it's on 4.2.2 still) since it won't do that without a connection (obviously).
 
I'd be grateful for hints on how to fix that. Doubt it's a hardware problem since I've seen a couple posts with people complaining.

 
The issue that was noticed before 4.4 was that the WiFi would sleep then have to be manually turned off and on until it could connect. So you might try flipping it on then off.

I see this very problem several times a week on my TN7 and it was there before I upgraded to all the latest versions of OTA and KitKat.  Turning "off" WiFi and then back "on" usually solves the problem although I have had to restart power a few times.  For me, these kinds of issues have plagued Tablet use for years and across multiple Tablets that I've owned.  It is just some of the quirkiness that goes along with Android devices IMO.  Just for grins, I'll probably make my next Tablet purchase with a Windows based OS to try something other than Android.  Windows may be just as quirky (I don't know), but I'm really tired of all the quirks that one has to endure with Android based Tablets.

Thanks for that idea.  I've only got a couple of add supported free apps (weather based), so it would not be hard to see if removing them solved the problem.