Do you get mad that you have to pay more for HDTV's as well? Is Samsung a joke for charging more for a 52" than 47"? Lol
I agree with the OP. The price and product differentiation between the mini and Air is odd.
When you buy a TV, you consider where you will sit, the size of your room, etc. Nearly all HDTVs have 1080p resolution, but with bigger ones you are usually sitting further away, while a 32" TV might be for a smaller room or bedroom, for example.
So in this sense the perceived image of all the HDTV sizes is comparable because we really do sit at different distances from the TV based on its size. But to say that we similarly hold tablets at different distances away from our faces is a bit of a stretch. I would bet that both the Mini and Air are held at about the same useable distance : 18-24 inches.
So the Mini truly would look better in this case, at 326ppi. This is not a misunderstanding of ppi, it is an exact understanding. We are not talking about TVs, we are talking about tablets that have a fixed useable range - our arm's length. At the same distance the Mini will look crisper than the Air. Some won't notice, some will, but this is an objective fact.
I agree with those saying that the Mini is now the better deal. Even though some people might prefer the extra screen real estate of the Air, the fact is that no additional information is being presented on the larger screen. It's screen size vs screen quality - call it a wash. Since there is no better technology driving the Air, and since the Mini carries a weight and portability premium and is yet $100 cheaper that the Air, it is the better deal.
In my view Apple should have made the Air 32/64/128 with 2GB ram while the Mini would get 16/32/64 with 1GB ram. Then the 399/499 base model pricing would have made more sense and would actually push people more towards the Air, which may actually have higher margins than the very compact and technologically impressive Mini. We'll know that for sure when we see a teardown of both devices.