I was so disappointed when Jobs said no to the 7" iPad. As much as I love my iPad, I NEVER take it outdoors because it's too big. A 7" would be perfect for me because it's a more manageable size (like kindle), I could thumb type on the landscape keyboard (it requires a surface because most thumbs aren't that long), it's less flashy (contrary to popular belief, not everyone wants to advertise they're carrying expensive gear) and it would probably increase Macbook air sales (11" Air vs 10" iPad overlap in many real world usage scenarios).
So I'm rooting for all the 7" android/winmo7/webos tablets to succeed simply because it will force Jobs to rethink things.