I think that there is. Surely, there are people out there who want an iPad but do not need/want features such as larger screen, "retina" display, or more advanced hardware specifications. These people cannot justify paying full price for the current "big" iPad but an iPad mini would be perfect for them. I've been waiting for something like this for a while and I am sure I am not the only one.
But there are people out there who don't want the larger iPad, and aren't satisfied with the smaller iPhone/iPod Touch size either, but actually do want all the features of each of those, such as hi-res screen, "more advanced hardware specifications" and where price has nothing whatsoever to do wanting a mini iPad. This is the market Apple should pursue, not the one chasing price, that's a market they leave to commodity manufacturers who are all competing to see who can reach $0 (and its complement, zero-value) first.