You are altogether wrong... and all your assumptions are false. I'm sorry, don't mean to be blunt.
The iPad mini will be the #1 selling tablet by 2014, mark my words... it screams portability, like screeeeaaaams it!
I am getting, and the whole world will eventually adopt because of a price-point need for certain consumers and the use of a mini iPad actually being more comfortable for portable use & daily use nonetheless. Did you hear, it will be more comfortable for daily portable use... it will, guaranteed!
This will be the #1 selling tablet sooner than later... I give it 18months.
The only thing that could be a "mistake" is to jeopardize sales within the market because of a lack of product differentiation for an Apple Tablet, but Apple knows how to make marginal profits on products oh so well...
This is actually extremely hard to do on the business end, but Apple does this so well historically through an array of avenues. Furthermore, I wouldn't doubt Apple still makes profits by margins through all of the iPad product line per se. So, I do think the regular iPad will have some features that the mini may not see(or may not see for a certain timeframe) to make sure they offer some product differentiation in order to not cannibalize their own sales within the tablet market. They will create a leverage of software vs hardware functionality & vice-versa to always keep the marginal profits alive & ticking.
I do think, in a year or so, because of the iPad mini, Apple will start saturating the tablet market just like they did with the MP3 market. So, I applaud Tim Cook for seeing the market opportunity that SJ believed was not there(or he said was not there

). But, in my own gut feeling, SJ knew the iPad mini would come out, he just stated it never would initially upon the iPad debut, because he knew how to create the market... excuse me, SJ knows how to create markets(plural). God bless him!
iPods eventually got smaller... iPads will eventually be smaller. It's just a business model that Apple believed in as they pioneered the mp3 & now the tablet market altogether.