I don't get people's reaction here.
1) Why would you expect this to be the same price as tablets Amazon/Google make no profit on? Apple already dominates the tablet market with a highly profitable tablet. No way they would cannibalize its sales with a smaller tablet that generate no profit. Why would you expect Apple to lose money on purpose? It's like people can only see this from a consumer's point of view and can't analyze Apple's strategy from a business point of view, resulting in totally non-realistic expectations.
2) Why does everybody here talk of a 8GB starting capacity? This speculation has only started since the fake price list leak starting at $249, which this rumor contradicts. Either you believe one rumor, either you believe the other. People here just take the worse from each rumor. 9to5Mac is way more reliable than the other site, this is likely the real deal, and there probably won't be a 8GB iPad mini.
3) Stop talking about Retina. No way you will see a 2048x1536 7.85" tablet for only $329. Like I said, Apple is here to make money, not to lose some.