Oh for gods sake... no it couldn't have been a smaller iPad 4! Do people not realise how ridiculous that statement is from an engineering point of view?
This has been talked about so much over the last couple of weeks it's ridiculous but really it's simple:
iPad Mini: 200mm x 134.7mm x 7.6mm, 308g, 16.3-watt-hour battery.
iPad 4: 241.2mm x 185.7mm x 9.4mm, 652g, 42.5-watt-hour battery.
See the bit in bold? That's how much power you need to run a retina-equipped iPad with an A6X SoC. You'd save a tiny bit with a smaller screen but nowhere near enough to make a significant difference. The iPad 4 has a volume of 421,034 cubic mm in which to fit the necessary components and battery pack, the iPad mini has 204,744 cubic mm. Half the volume. Or, to put it another way, you'd need an iPad Mini 15.63mm thick to give the same volume. Of course it isn't that simple but it gives you an idea of the scale of the problem. Plus, of course, it'd weigh twice as much as well.
If you want a retina display in a mini you're going to have to wait for new screen tech and, almost certainly, a new SoC. Oh, and a new battery tech wouldn't hurt either. This may, note MAY, be available next year it may take a little longer. If you want a mini this year then this is the compromise you make to get this form factor. Simple isn't it?