If you notice carefully the new iPhone is not a resolution change but a size change; they can letterbox old apps because the dimensions and resolution is identical to old iPhones that way.

There is no comparable solution if you simply increase the PPI of the iPad Mini by 50%. It's either 1x pixels or 4x pixels, there is no middle ground.

less like "thrown out the window" and more like "nudged slightly"

The iPhone 5 lengthens the screen by 176 pixels in 1 direction, leaving an old style layout with 88 pixels of banding (a bit over 6mm) on each edge.

For Apple to run with a sreen resolution similar to the Nexus, say 1200 x 900, we'd have banding of 88 and 66 pixels along each long and short side respectively, so it wouldn't be too bad.