We'll see. I have a Fire and the form factor doesn't excite me, I've preordered a Nexus 7 to try out Jellybean but I don't see it lighting the world on fire. And I remain skeptical about fragmenting the iPad market into different sizes.
Again, I'd see them calling this an iPod Touch Pro over an iPad, but that's just semantics....
The reasons Apple was planning this, we heard, was the same reason they planned and executed on the lower price point iPod mini and iPod nano -- to take the oxygen out of the market. In this case, to leave no room for discount competitors like Amazon and Google.
Some have a hard time believing Apple would enter the low end tablet market. Apple didn't make a netbook and didn't release an iPhone nano. They thought differently and released the MacBook Air and the iPad, and kept around previous generation iPhones instead. Steve Jobs went so far as to say 7 inch tablets were DOA. So Apple couldn't, wouldn't, and shouldn't do an iPad mini, right?
That's me in a nutshell.
Jobs on 7" might be a smokescreen, who can say.