I think the general counterargument is: killing off a product line simply to replace it with a relatively iterative model (that could have easily been iPod Mini 2) is less a visionary move and more an attempt to double down by getting iPod Mini owners to quickly replace their mp3 players.

(Not saying I agree with that particular argument, but it exists.)

Their engineering team produced a much smaller version and their competitors had products very similar to the mini. So there was a very good reason to release the superior product -- why hold back?

What was great about the mini -> nano transition is that they did actually kill the mini. Too many companies would have hedged their bets and kept it around, which I think would have been a mistake.