If the next thing is a mini iPad and with the same resolution as the 9.7" iPad, of course it would be introducing problems and fragmentations.
Even if an iPad app could be usable at 65% on the mini iPad, inevitably some apps would require work from developers to ensure support of the 2 sizes. At the exact same resolution, they'd have to adapt to the smaller screen, maybe sometimes using bigger font size or bitmaps elements because it now becomes too small. etc. And doing so, apps would then appear with too big elements on the larger iPad. Or you'd have to be able to create apps UI for each iPad size separatly. That's all called fragmentation.
Problems like that wouldnt' be avoided. App developpers wouldn't do like before when they only had 1 size of screen targeted.
It's illusional to believe you can do the same thing with a smaller screen. Adaptation from both user and devs would be necessary.
Hence, an hypothesis like
this can adress partly the problem of usability, maintaining the same pixel density as the 9.7" iPad (it can also be done with a screen with different pixel density, but easier to deal with size of elements with only one pixel density). Now, that's still introducing fragmentation, but that can't be avoided if you introduce a second size of tablet.