I think you are remembering wrong, I was in an Apple store many weeks after the iPad 3 came out and they did not have any in stock. And the iPhone 5 is still shipping in 3-4 weeks. That is Apple's biggest profit maker, they would much rather have those shipping immediately than the iPad mini. So I don't think it is increased capacity to blame for the lack of a sell out.
Let me declare I love Apple, I have tons of their products and am even a stock holder (I bought at $95 right before the iPhone was announced).
I want it to be a best seller, but I think that Apple screwed up by making this the first iOS device not competitively priced.
Sure you can't compare the 8GB Nexus 7 at $199 vs the iPad mini with 16GB. The screen is larger, albeit at a lower res and the Apple ecosystem is far superior. But to get GPS on a mini you have to spend $130 more for cellular data. The Nexus 7 at $199 has built in GPS. So we can call those off setting. A some clueless mom buying a tab for a kid sees $199 vs $329. That is end of story.
Even if Apple had squeezed just $30 off the price at $299 I think the black one would be sold out already.