I travel a lot, with a decent amount of paperwork in my bag plus an MBA, and it still gets heavy (so much better than when I had the 15" MBP, though). I had an original iPad for a while (my wife's hand-me-down), but it just got too big and bulky in combination with the MBA.
I can't really not bring the MBA, so something that I could A) read books on; B) surf the internet; C) Use Maps; D) Check email; E) Use the productivity apps (Things, Reminders, Pages, etc.); F) maybe watch a few movies on; and G) listen to a sub-section of my 50GB music collection would fit my needs perfectly.
That's an iPad, but the 10" is too big. Something smaller, lighter, than just can slip in and out of my shoulder bag would be perfect for me. If it were cheaper, that would just be the cherry on top.
Just like the MBA is a netbook but BETTER, a 7" (or 6.5 or 7.13528 or whatever) iPad would be a more-portable tablet but BETTER. I don't see any reason why they wouldn't produce it if they could resolve the scaling issue.