[huggyface]

I'd guess that Jobs was simply conveying his findings at the time

Apple had itself pretty tied up with two form factors, with no near term hopes of coming out with a form factor between the two. Jobs was simply trying to undermine Samsung's efforts (though Android succeeded in doing that for him). Seriously, if 7" doesn't make sense for a touchscreen interface, how could a 3.5" screen possibly make sense? Only in Apple world is a 7" tablet simply a 10" shrunken.