i disagree that an 7" tablet is too small. i've had a 7" tablet for over two months and the form factor was perfect. i'll let you all guess what it was (i returned it). during that time, i had fun messing with it, the rooting, the ROMs, the learning process, hacking, but when it comes to actual usage, even with overclocking, memory management, and task management it was a chore. the browsing was still slow, the gaming was pathetic, the e-reading was okay, etc. but the 7" screen was perfect in the hand, in storage and transport, and page rendering.
but, i agree that the hype over the upcoming mainstream 7" tablets is way overblown and overpriced. what's coming are all just glorified and over-sized smartphones. same hardware and software with a bigger screen.
i have a feeling that these 7" tablets will cause negative backlash in the user community as they will soon figured out that these machines are under powered and limited from the hyped advertisements.