I'd rather have an 11" iPad which can be its own stand-alone computer, have the landscape dock, and have a higher res. screen of preferably 1600x1100 (or somewhere around there).
Come on, Apple.
I've been thinking that, myself.
As a previous commenter said... if you are going to go tablet, go BIG.
Why not an 11" screen? Maybe even a 13" screen, and make the IPS LED-lit screen module in common with the MacBook Air folding laptop.
If you are going to need a case or bag to carry it around... it might as well be as big as a generous netbook, or small laptop screen, with iPad functionality.
Then, a 7" carry-portable that is still notably larger than an iPhone screen, and a direct competitor to other manufacturer's alternatives... makes a bit more sense.
The only thing I would then suggest, is the ability for iOS to directly update itself, without the need for a base machine with a full OS and iTunes to handle the downloads and installation.
I don't want to eliminate or curtail the sync functionality at all... (maybe expand it to be WiFi capable, without needing to plug in)
But it would be nice to be able to tell people that an iPad can work as a stand-alone internet device without a more expensive computer in the house, like my mother-in-law, who just does e-mail and web.
Being able to print to a basic wifi printer. The ability to import and manage simple family pictures, or to take them directly... (which the camera connection kit does allow), and the ability to update it's own system software, and perhaps the ability to back itself up to a simple portable external hard drive, or an Apple TimeCapsule.
That would basically un-tether iOS devices from the necessity for a master MacOS or Windows system, if a novice-user wishes to use ONLY an iPad or other iOS device, and not maintain or incur the cost of a larger master system to sometimes otherwise sit idle.