I find with the current iPad if my thumb is over the screen even a few millimeters it affects the multi-touch usability of the iPad as it registers the thumb overlap as a point of contact. I have found playing games that if you are in the middle of the action and re-grip the iPad where you are not aware your thumb just moved over the screen suddenly the control of the game doesn't work properly.
I am worried that the thinner bezel on the iPad Mini might be a huge usability issue if Apple has not addressed the impact of a stray touch encroaching over the edge of the screen unexpectedly.
Considering the iPad Mini is probably going to be targeted more like a game device rather then a productivity device, this usability defect could ruin the iPad Mini.
Unlike the iPhone where you "pinch" the device in a hand by holding the flat sides of the device, the iPad Mini is still large enough to require a grip where the thumb and fore-finger pinch the top and bottom of the device in many situations, such as gaming.
Perhaps Apple has addressed this in iOS 6 by having some kind of "slush" zone where errant stray touches around the edge of the screen are not formally registered, or perhaps beefed up the multi-touch logic to understand "purposeful" touch instead of errant touch, but given Apple's track record with usability I doubt they even consider this an issue and simply opted for the the aesthetics of the iPad Mini design over the usability of it. Form over function has always been Apple's modus operandi.
I'll wait for the verdict when the device is released, but this is a usability issue with the current iPad just that the bezel is thick enough that it does not affect most people. Just try using the iPad with your thumb partially on the edge of the screen and then imagine if the bezel was thinner then your thumb.
You're exactly 100% correct... this could be haphazard with the outer area being more susceptible to a stray-touch because the screen is closer to the iPad Mini's edge. I thought about that also when I saw the iPhone 5's screen being next to the edge, but with the smaller form factor in the iPhones, these problem doesn't really exist too often...
But, if this iPad Mini comes out the way this mock-up shows, I do believe this could be an annoying flaw, and hurt user-ability when using the new "more" sensitive in-cell glass.
Good post by the way.