Are you having problems browsing to any of the other folders? If I recall, you had to give PS Touch permission to import images (at least from the Camera Roll) on the iPad itself. (Via privacy settings, if I recall.)
All folders can be browsed except for My Photostream which did work prior to IOS8. When IOS8 first came out, My Photostream has bern discontinued but with further update in 8.1, it was reinstated. Photoshop Touch no longer shows photos, only blank boxes, in that folder.