You're assuming that the demand for both is equal. People might be more likely to buy an iPad Mini than an iPad as a gift. People might be more likely to try an iPad Mini because of lower cost. People might be more likely to get an iPad Mini because the weight and size is significantly less. A family might be more likely to get multiple iPad Minis rather than just one iPad. Some people (like me) will get both.
I don't know if any of the above is definitely true. The point is that you're making a comparison using an assumption that the demand for the two products are equal. Furthermore, you're assuming that someone who buys an iPad Mini is buying instead of an iPad, rather than instead of a Nexus or Kindle Fire. I don't think your assumptions are correct.
I'm assuming nothing. I simply believe, and I felt the same way when the mini was announced, that this is one of Apple's first high profile attempts to react to the market instead of dictate the market. This item was made and sold purely as a way to increase market share, which doesn't make much sense considering Apple's tendency to sell a premium product.
This is why I think a cheaper iPhone model is a mistake. The iPhone is a high margin product, a premium device, that managed 50% of the market. While I don't believe that companies should worry entirely about cannibalization, I'm curious to see just how much a cheaper, lower earning product steals from the premium device. Cannibalization for the sake of market share and appealing to lower income consumers is a great, great mistake.