Have to agree not only with the price point made by Samurai, but also a 7" is "do-able" by Apple.
It very well could use the exact same specs as the iPad2... however with a same resolution sized screen packed into 7", essentially being able to be labeled "Retina", since Retina only means "undecipherable pixel resolution at a normal distance to the eyes."
Due to being right in the middle according to size, you would be able to use normal iPhone apps as well as HD iPad apps if you so desire, and are not bothered by the smaller buttons, etc.
IMO a 7" makes total sense and would also be a huge hit. SJ was just "sproutin' off" as he does from time to time. And as anyone who's read my posts in the past knows, I'm a HUGE SJ and Apple fan. The success and sales that would come from Apple/SJ backpedaling on this, would take make the screaming, gnashing of the teeth, and forthcoming "tech-blog-blathering" an easy pill to swallow.
RIMM = thoroughly dead (I'm betting anyway they get sold by the end of the year)
Samy, Moto, & assorted other tablet wanna-bes = "...they have to do better"... repeatedly... as some would drop out of the race even, leaving the landscape looking just like the MP3 player/iPod one.
Actually, that would be quite sad, since competition is a good thing, even more so with tablets than music/media players.