Significantly increasing the size of the iPod screen is transformative even if the device in question doesn't do much more than the Touch/iPhone. I mean, what's wrong with an 8-inch touch device that plays movies, surfs the net, is a fine gaming platform, ereader etc.
Look, the problem with running apps that you would on a full-blown Mac is that many of them would be problematic on an 8-inch screen. Photoshop on an 8-inch tablet? Thanks but no thanks.
Still, who among us would be unhappy about surfing the net on a handheld with an 8-inch screen instead of doing so on a handheld with a 3.5-inch screen.
Less is more, something Apple understands far better than any other electronics manufacturer. By resisting the urge to build a pricey tablet that really isn't ideal for doing assorted tasks, Apple will bring to market a product that is exceptionally good at doing what it does (see above), not to mention hitting a sweet spot re price. Fact is, if this tablet comes close enough in price to be comparable to Apple's laptops, what's the point. If you want a portable device that runs the Mac OS in all its glory, buy an Apple laptpp. They make some great ones, I think, with prices coming down all the time.
The Touch+ would be an enhancement of the Touch form factor, not a Macbook or Macbook Pro alternative. There is a need for such an addition whereas the Macbook line works just fine, thanks, as a portable means of accessing full-bore Mac software.
That said, price point is critical. We would all likely line up to buy a $500 Touch+ device whereas the market for a $800 tablet is rather thin. Personally I would never pay Macbook prices for a smallish device like the tablet is bound to be.