I don't think that Apple will have to take back what SJobs has said about the 7" form factor. In fact, I still think that 7" is not ideal for some situations -- where the bigger iPad shines -- e.g., magazine viewing and typing. For a majority of the use-cases, however, the 7" is an awesome form factor.
The rumored iPad mini, OTOH, is said to have 7.85" or roughly 8" screen that might be the sweet spot for having a smaller iPad with a bigger view for magazines and bigger keys for the keyboard as compared against the 7". Should this be true and the price is somewhere around $299 for a 16GB, that would definitely compete against the Nexus 7.
Don't get me wrong, I have the iPad and the Nexus 7 and like +MG Siegler
, the Nexus is best paired with a laptop - maybe the 11" Macbook Air like what I do. The iPad is a laptop replacement for most use-cases - and this is what I also do. Nexus 7 + 11" MBA or iPad.