I don't know. I can see it and then I can't. Apple isn't having problems selling the full size, so why offer a smaller one at a discounted price. If you want a small one, get one of those $99 android tabs, or a PlayBook.
I'm of a different opinion. If the market exists, and I'm sure it does, why not? And it won't be an entry level pad either . It will be a pad that will pack a punch. It's a great compromise. A work pad easier to carry. I'm all for it. The Sammy 7.7" is a delight. The Playbook also, just due to their size.