yes but apple is missing the huge market that isnt willing the shell out $600 for a tablet. As verified by many posts on this thread, those who buy the more expensive 10in iPad are not necessarily those who would buy the 7.5in iPad, therefore, apple wouldn't be stealing its own customers.
Correct but how big really is that market. I would hazard not as big as folks think. And then there's the folks that buy something like the Fire, hate it and return it within a week to more often than not, get an iPad. I've seen tons of comments all over various boards to that same effect. yes some of them are buying refurbs to spend a little less money but it's not that much less.
And given that the iPad sells millions hand over fist, I don't think that Apple is really worried about those smaller products etc. Or the "lost" market at this point. Not in the sense of trying to make a product for them. It's better for them to keep their production lines all the same and find ways to encourage those folks to spend the money on what is offered. With things like electronic textbooks for their kiddies. If a school says you must have an iPad, you must have an iPad.