I agree with onion on alot of points. But look at the iPad mini. It has been proven that it is cannabilozing sales of bigger ipads. But they don't seem to care. As long as the product is getting out to more users. I believe this is ms main strategy in the end. To get these MS devices, whether pro or rt versions in more peoples hands. I think MS needs to tap every option available. Competition only benefits the consumer in the end. I think if MS released a surface mini, android and Google would have no choice bit to step their game up even further. I want MS, whether full windows or RT in the tablet segment to flourish. There is room for them to tap into the sub 10in. Market and see how well they fare. I know I'd get a mini surface in a heartbeat. Even that aconia w3 seems cool although its slightly underpowered.
Like the other poster said, I think the op, if this smaller device is powerful enough, it could easily be hooked up to a monitor and keyboard to become a full blown pc if productivity is what you need. I can see even more people carrying around a smaller more portable device. I'd like to see all 3 MS formats flourish.