Here's what everyone in this thread seems to be missing:
If you take the 9.7" iPad screen, which is currently at 264 PPI, and change the PPI to 326 (iPhone PPI) while keeping the same number of pixels, you get the 7.9" screen used in the iPad mini.
If you take the 264 PPI screen from the 12.9" iPad pro (2048 x 2732), and shrink it to 326 PPI (with the same number of pixels) what do you get? A 10.5" screen! I doubt this is a coincidence.
I heard a few people on podcasts, blogs and other sites, mentioning that they loved the increased UI screen estate provided by the 12.9", but eventually found it too big and heavy so they went back to the 9.7" when the pro version was released.
A 10.5" iPad at 326 PPI would provide the same exact 2048 x 2732 resolution as the bigger pro, but would be lighter and more portable. And for those who don't need more UI estate and have vision problems, could run in zoomed mode using the 9.7" UI layout.
And developers wouldn't even have to make any change to their apps (given that they already support the 12.9"), they would run natively using the 12.9" UI but on a denser screen, just like what happened with the iPad mini.