Check out the audio replay at the link below. An excerpt:
Steve On 7-Inch Tablets
We think the current crop of 7-inch tablets are going to be DOA-Dead on Arrival. Their manufacturers will learn the painful lesson that their tablets are too small, and increase the size next year, thereby abandoning both customers and developers who jumped on the 7in bandwagon with an orphan product. Sounds like lots of fun ahead.
The reasons Jobs gave for the death of the 7-inch tablet were manifold, but they all boil down to size. Too small for comfort, too big for Froyo. For Jobs, 10 inches is the tablet sweet spot, end of story. For consumers? They'll have their chance to decide soon enough.