There is certainly a segment of the population that the ipad is a bit too big for. Commuters who spend a lot of time on public transportation like the size of the Kindle for E-reading. I think this is a good move to Apple and don't really understand all the bashing.
The point is that I can, right now, tell you every main product Apple sells off the top of my head. You can go to Apple.com/store and see them arranged on that one page.
Compare that to Dell.com where you have hundreds of choices (it seems like) across dozens of different pages that are constantly changing. I have never met even a die-hard Windows fan who can tell you what's what on Dell.com at any given moment. 'Just go on there and browse around' is what you have to do.
I can't explain it all here but there have litteraly been entire books written about the strength of the Apple approach. Every time you make the customer make a choice between 2 things you are ACTUALLY giving them 3 choices: Pick A, Pick B, or walk away. This is why you configure a Macbook on one web page. Dell's multi-page 'setup' system gives people many, many chances to decide "eh, I'm gonna go look at HP or Sony."
But it's not just the website...the product line itself has to be simple. The best page in the world can't make many similar objects seem not confusing. It's the reason there is not a 14" Macbook between the 13 and the 15. It's the reason there is not an iPhone mini or a double-high Mac Mini. It's the reason there's not an aluminum 15" Macbook Pro and a white plastic 15" Macbook.
I can promise you that the 6 iPad options are making Steve Jobs sweat, but they really had no choice there. But wait and see. I bet that next year there will only be 4 iPads when they kill the bottom model and drop the price of the other 2 by $100. I'm certain that Apple can't WAIT until they can have only 4 iPad models.
Given all of that, adding different size iPads just doesn't make sense for the Apple business plan.