16:9 tablets are unwieldy when used in the portrait orientation. They are landscape-only devices. That is a massive reduction in usability.How can more screen space (as the iPhone5 is getting) with more pixels cause a reduction in the iPad's usability?
More pixels could only allow more options. If you reduced the size of the screen of reduced the resolution then you could say that.
Changing the aspect ratio changes how content is rendered. As shown above, you would actually see less of a web page, even if the tablet has the same height and is physically wider with a higher resolution display.