I also think the size is an advantage for a whole bunch of use cases.
I don't have a tablet right now, but I do have a Kindle. I think it's about the same size as the Nexus 7. I find it to be very convenient: I can easily hold it with just one hand when I'm laying on the bed, it fits into my tiny laptop bag and I can even put it in a coat pocket (great for commuting by train). Anything bigger would be less convenient.
I don't have a tablet right now, but I do have a Kindle. I think it's about the same size as the Nexus 7. I find it to be very convenient: I can easily hold it with just one hand when I'm laying on the bed, it fits into my tiny laptop bag and I can even put it in a coat pocket (great for commuting by train). Anything bigger would be less convenient.