Data-only MID's are one thing, but phones are of course problematic because almost everyone has only one account / SIM card for their phone. I wouldn't assume anyone with a 7" mid to use it as their primary phone because you want to carry your phone around you at all times, and that's simply too large to be pocketable.

So a 7" MID phone needs to have a separate SIM/account. And people are not happy with having to pay for two contracts, nor to have two separate phone numbers. A part of phone-ness is the fact that people call you, i.e. know your number and use that to call you.

Then again, some cellular service providers are starting to provide dual SIM solutions: two SIM's with the same phone number and the same account. I have a dual SIM for testing iPhones and competitor devices with my own phone number. But it's quite funny: my E71 and the iPhone rings at the same time. So that's also not a perfect solution; it also costs a fair amount, at least here in Finland.