I'm curious about this myself. There is a plurality of reasonable explanations, some that can go either way, something that could stand a follow up survey to nail down a good explanation rather than resting on speculation.
There little point in an iPad mini exceeding the main iPad's dot pitch. The idea is to put pixel density just below perceptibility, not waste pixels just because specs are cool.
I just don't see Apple scaling the exact same UI down to a screen half the surface area, it needs a smarter translation than that, much like how good iPad apps aren't just scaled up iPhone apps.
iPhone introduced & shown to the world January 2007, for sale June 2007. First Android phone for sale, October 2008. It wasn't that great either. How is getting a touch screen Android out nearly two years later an impossible thing?
Key words: on contract. You don't get to ignore the cost of the contract, because the contract is used to subsidize the contracted device. You can't complain that a $400 device is worse than an $850 device and not look silly. It's supposed to be that way. Some of the draw for a Touch is getting an iOS device without service or a contract. They're not going to give you the same hardware without contract for the same price
I think they're trying too hard to negatively spin it, and that they're flat wrong on their point too. Fewer cables means there's less to go wrong when you do try to fix it. The octopus of cables with tiny connectors in the iPhone 4 illustrates this well, it would have been easier, not harder, to deal with if it were possible to connect fewer cables and fewer screws on a more unified subassembly with a wider connector, to the main board. The only down side in my opinion is...
It's another set of logistical concerns that does need to be addressed. I think there is considerable value in keeping the number of supported resolutions down, for Apple and for third party developers. If it needs to behave like a third (or fourth) category of iOS devices, then that's a potential problem.
Old Touches had TN displays, the new ones are IPS. That's a considerable improvement right there. I think it's 80-85% of the latest iPhone for 50% of the real price, the phone service subsidy significantly distorts the apparent price of phones.