I've read arguments multiple times but I just don't get why people don't get the reason for the price rise as a business strategy. In the past Apple has doubled the storage space (e.g. iPhone 3G to 3GS), the RAM (e.g. 3G to 3GS, 3GS to 4, 4S to 5, 6 to 6S), added new technologies (retina displays, multicore chips, fingerprint sensors/secure enclave, NFC etc) whilst maintaining a price point. I still really don't see what in the rumoured 9.7" specs justifies the price rise.
I almost wonder whether the price increase was to avoid killing the 12.9" model dead. If a 10" iPP cost $500 with pencil and keyboard support, who in their right mind would spend $800 on an extra 3"? Sure, there will be some people who need the bigger screen and some who will buy it because they want the 'best' system, but the mass market will go for the cheaper option. As has been pointed out the iPP 12.9" can be had for $700 or less. Combine this with a $600 9.7" iPP and you've got a bigger chance of an upsell to the larger system.
Again, I'm not angry at Apple. I was never going to be in the market for a new iPad (maybe a refurb Air 2 later in the year) but the pricing strategy in the face of rapidly faling sales and increased competition combined with a business need to encourage existing users to upgrade makes very little sense to me.