I am typing this on the new iPad Air in my signature. I went from an iPad 3 to an iPad mini, and now back to full size with the iPad Air. Main reason is that for my use case, I appreciate the larger size. My use case is attached to a logitech keyboard cover 8 hours a day at work as my, ironically enough, Windows 8 laptop which sits next to my Macbook Air. I RDP into a virtual machine running the company's accounting software and do everything else on the Mac. With the mini, the keyboard is simply too cramped to be productive, but with the Air, the keyboard is very good. The reason I do this is because I travel extensively and using RDP software (Microsoft's newly released RDP client is great and has simplified this a lot for me, and made it cheaper!!) I have a truly best of both worlds scenario, as long as I have a good keyboard to pair with iPad. I get flawless iOS, OSX, and Windows (even though I hate using it) running well in an extremely portable and high performance package, that weighs half of what even my 11" Macbook Air does!!
I did absolutely love the mini's size and portability, and if I were using it as "just a tablet" I would definitely choose the 2nd gen. retina over the Air.
Just wanted to give you a bit more perspective. Many, many people actually prefer the 9.7" screen over the 7.9" and it most often has to do with either informed, logical reasons like mine or simply personal choice, not ignorance or ego massaging justification.
Agree with your comments on iOS 7 though - it needs extensive memory optimisation/leakage fixes above all else, as well as a long list of bug fixes and UI graphic optimisation. How can it be that my iPad can zip through Infinity Blade 3 without skipping a frame, but stutters on a basic UI zoom effect whenever I four-finger pinch to exit an app. The iPad version of iOS 7 is the worst. I mean it even says "Ringer silent" when I toggle the hardware mute switch as if it were an iPhone. Talk about unpolished!