Makes no sense.
1. when the MBP 13" showed up after the MBA existed the sales of the MBA dropped like a rock. Even before they became scarce the MBA had dropped to the bottom of the "best selling" model list on the Apple Store. If anything the MBP 13" should replace the MBA ( drop the optical drive prehaps and add second fan and better graphics like rest of MBP line up). Just kill off the MBA. The 13" is not that much more heavier. Differs by the weight of the power cord/supply which you'll need if want to do 10 hours of work with the MBA anyway. Bottom line the MBP 13" is a better match to overall market demands than the MBA is.
Chucking 1.4" of diagonal screen space for nothing is not really acceptable. Extremely, few who specifically wanted a MBP 13" is going to happy with that. Even fewer, if the updated MBA ended up more expensive than a MBP 13". The smaller screen is a bigger pain to work with if have multiple things to do.
2. If want to keep the MBA need to differentiate away from the MBP 13" more. Shrinking the screen on one way of doing that (along with equally resizing the case into smaller dimensions. ). That will open up a wider wieght gap with the MBP 13" and probably get some battery life back also.
3. Making the MBA more "powerful" (in a computational sense) doesn't fly because there is nothing to put in there that would. There is no C2D that is a speed bump. The larger packaged C2D that the MBP 13" won't fit.
Likewise if go Core iX (X = 5 or 7) don't fly because gut the graphics performance. Furthermore that notion is whacked because the MBP models are the "powerful" models.
If trying to push another model into that category that makes no sense.
The MBA focus needs to be on something else besides "horsepower". That just brings more fans and batteries. The MBA should be trading off "horsepower" for something else since it is a different model line.
If Apple wanted to be conservative this would be a 11.6 MBA with the current C2D cpus and the same Nvidia 320m update that the MBP 13" got. So decent boost on graphics and shave weight with smaller case and screen.
It wouldn't be a "horsepower" move.
Similarly if stuck a AMD solution in there would not challege the MBP lineup on "horsepower" but would be smaller, lighter, etc. but probably match on battery lifetime and graphics horsepower. Intel's solution that would fit isn't coming to next year so it is hard to imagine how that is going to be in something launching later this month.