The Nexus 7 has the same resolution that most 10" tablets have now, so why would you need reflow?
Shouldn't everything look the same as on the current 10" tablets, just sharper?
It might be because my eyes are still young, but I prefer smaller screens with a high pixel density to larger screens with a lower pixel density.
Even though it's sharper, that does almost nothing if the text is too small to read comfortably.. Cramming a PDF into a 7 inch screen is not going to work as well as on a 10 inch screen.
I have a Galaxy Tab 2 7" (which is a mouthful) and read a couple of Hyperink PDFs on it. It was not comfortable. Kindle books work great, and I presume the Hyperink ePub files do too.
It might be because my eyes are still young, but I prefer smaller screens with a high pixel density to larger screens with a lower pixel density.