People think retina display will come in iPad 3. But people do not realise what they are asking for.
Could apple release retina display for iPad 3 ? Yes. But it would be at a huge performance cost.
Think about it. Getting good looking games to an acceptable FPS (25+, minimum) takes quite a bit of grunt for a mobile machine even at this time at the ipads 1024x768. Now go on the internet and type in "gpu benchmarks" notice how the high resolutions of desktop monitors (1900x1200, etc) have much lower FPS than that of lower resolutions ?. The same would happen for iPad 3, except, this would not be acceptable to developers, it would not be acceptable to consumers, and definitely not acceptable to apple. In fact quite the opposite, people would expect an improvement, better graphics and higher framerates - even on the supposed 2048x1536. This would require
huge computing power for a tablet computer. I don't think it's impossible to get hardware to power a retina display and its games, i think you could do it now. But i don't think you could do it for $499 for such a powerful CPU and GPU. Oh wait, i was forgetting the cost of the retina display. Make that, i don't think you could do it for $800 or even $900.
And apple are not going to sell an iPad with lower battery life. Which is exactley what it would have.
If apple get this all figured out for iPad 3, MAJOR KUDOS. I think it's so unlikely, but apple has some serious financial muscle and intelligent minds so it isn't totally inconceivable. Knowing Jobs, he would do it at a financial loss as long as it meant apple kept there market share until next year when it becomes profitable again
edit:
Another point to remember is before the iPad came along a 9.7inch 1024x768 display probably existed in some form or another, and so the cost of adapting and manufacturing wouldn't be to substantial. However it's pretty likely a 2048x1536 9.7inch display does not exist except maybe in prototype format or in some technology science lab - to get this thing to acceptable yield levels and pumping out hundreds of thousands in volume per month would be, err, expensive ? you bet.