iPads need wider screens... They absolutely suck for watching movies or other video content thats shot in 16:9 aspect ratio. Your 9.7" screen becomes like 7" because all you see is black bars...
I have tablets in both aspect ratios. In my opinion, 16:9 on a tablet is
far better for viewing 16:9 content, so on that I agree with you.
But it's a mixed bag. 16x9 is
worse for everything else. It's worse for reading books, viewing web pages, and playing games. Note that the Microsoft Surface actually went from 16:9 to 3:2, the exact opposite of what you are proposing needs to be done, and virtually everyone thinks that is an improvement.
As a home theater enthusiast, I wouldn't watch a movie on a tablet anyway, so I'm quite happy with the iPad's aspect ratio.
The iPad line-up is probably going to see 2-year refreshes instead of 1-year, similar to that of the iPod touch line-up. The tablet market isn't of much priority anymore, I suppose.
With iPad sales falling fast, that sounds a lot like giving up. Sure there isn't much potential left in iPod sales, but I still feel like the tablet market is young.
If anything, they need to make the new models compelling again. Retina and the thin/light treatment were compelling features in the past, but we have that now so Apple needs similar compelling features moving forward. For example I do really miss wireless charging like the HP TouchPad had.