I was right there with you. Its a much smaller form factor it feels wrong after using a full sized iPad for years. I think my issue was based on what I was getting money wise versus what I had. My neighbor actually purchased mine for me using her Target employee discount and red card bonus. 15% off was not a bad deal. I asked her to take it back because I just couldn't see why I should keep if if its no different processor/resolution/memory/ well just about everything minus camera and screen size.
I have since decided to keep it and must say that if you can get passed the money you are spending for something that is based on 1 1/2 year old tech, you get used to it and really is a nice device. What purpose does it server.... I guess if you travel a bit, its nice to have a smaller lighter iPad. It's just another gadget to own and if thing your phone is to small for some things and iPad is to large to carry around.. this is just right.
Ok, to be honest, it doesn't serve any purpose over an original iPad or iPhone. Its in the middle and justifying spending money when you have the other two is a bit hard to make. I am growing to love my mini but still have my iPad2.. I would like to sell it but have a feeling my kids would have something to say about that.