Double the pixel density of the mini (163ppi), and you get : 326ppi.
Current ppi of iPad with retina display : 264.
Obviously, apple won't let the mini steal the fullsize iPad's main selling point. So, they will likely double both resolutions at the same time.
Because there is no need for it
ipad Mini 1024-by-768 resolution at 163 pixels per inch (ppi) Used at arms length (or book length as i call it)
iPad Retina 2048-by-1536 resolution at 264 pixels per inch (ppi) Used at arms length
iPhone 5 1136×640 resolution at 326 pixels per inch (ppi) Usually used much closer than arms length, so the pixels NEED to be smaller to not be detectable
I get the sense that there's a misunderstanding about what "Retina" means, how the pixel density comes into play, and why Apple doubles the numbers.
The idea behind "Retina display" is that the human eye can't distinguish individual pixels at the expected viewing length. As one post above correctly stated, the smaller screens tend to be used closer to a person's face and thus need a higher pixel density than larger screens that are held farther away.
So why would the Mini need to have a pixel density of 326 when the current iPad has a pixel density of 264 PPI, even though they're both likely to be held at similar distances? It's for the same reason why the iPad Mini has a higher pixel density than the iPad 2: resolutions for developers. In order to prevent creating a fourth resolution for app developers to worry about the iPad Mini runs at 1024x768, same as the iPad 2. However, bearing a smaller screen it required a greater pixel density to accommodate that resolution.
Why the doubling of the pixel density to achieve Retina? If the iPad Mini had 264 PPI like the full-sized iPad it would be a "retina" display and its pixels would be very difficult to make out, but the resolution would be something unique. Doubling the pixels (and the resolution) makes scaling very easy for app developers to pull off. As a result, there is little choice but for Apple to double the pixel density here, as well.
The Mini's display is better than the iPad 2 but it is far from being a retina display. I write notes on my Mini all day. I never had difficulty reading my notes on my iPad 3, even though my writing is small and I used a setting for thin brush strokes (this is partly by necessity - able to fit more information on the screen at once). With the Mini, I struggle to read my writing and frequently need to enlarge and zoom around the screen. I would not trade the battery life for a retina display, but the retina display will greatly improve the usability of the device for me.