Here's an editorial praising the 7" form factor of the Galaxy Tab:
http://news.cnet.com/8301-13924_3-20023187-64.html

It seems that its becoming more and more common to hear that Steve Jobs 'was wrong' in his assessment that 7" tables were 'Dead on Arrival'. In fact, I remember him raise the case that netbooks were worthless based upon their size, only to release an 11" Macbook Air. It seems that the 7" form factor is loved by many.

I suspect that similarly, Apple will release a 7" tablet in due time.