Nice leap to assume this makes the gpu bigger. A company that has spent seven years trying to deliver this to mobile gpus did not likely say "oh screw it just make the chip bigger and use more resources". They could have done that seven years ago.
The diagram shows that it's an existing Rogue product with RT hardware added. You don't get something for nothing.
This is the first commercially viable hardware implementation of RT hardware. So no, they couldn't.
They can do that now with stencil shadows.
Course raytracing can do it far more accurately and produce a wider variety of effects without as much memory overhead, since it's more or less emulating radiosity/photon bounces. But it does have its costs. Unlike rasterization, raytracing performance doesn't scale well to higher resolutions. Assuming they're able to make a mobile GPU powerful enough to do it, a raytraced iPad game running at 2048x1536 would probably eat through your battery in about 5 minutes.
That's the major reason why raytracing hasn't replaced rasterization just yet. It'd be nice being able to make models where the reflectivity of its texture is accurately determined by light bouncing off the material as opposed to a shader that convincingly fakes it (and requires considerably more video memory to do so), but you'd have a difficult time rendering it at even current HD standards while maintaining a good framerate, let alone retina displays.
As I told the other poster, I was talking about why you'd want better shadows. Not stuff that RT can do that rasterization can't.