I think it is still a bit early to rule out 7" tablets, since Tab is the only 7" device in the market now and running a non-recommended OS.
"Price" could be a deciding factor in this case. $649 is a ridiculous price. ( http://www.amazon.com/dp/B00480P67K/ref=asc_df_B00480P67K141... ) Pricing it above iPad is unbelievable. Someone who pays $649 (or $599 through discount stores) expects a greater value than iPad experience, which Froyo does not meet.