Unless they justified it by agreeing that this size is ideal for this type of device....im cool with it as long as they admit they did it for a good reason.
They did it that way because Apple's "tablet" resolution is 4:3 aspect ratio and that's how developers know they are dealing with a tablet. Apple's only Tablet resolutions are 1024x768 (older iPad, Mini) and 2048x1536 (newer iPad). When Apple introduces a new resolution, it makes things messy since the operating system is not designed to scale apps out of their native resolutions easily.
So when Apple decided to introduce the Mini, they had three options.
1. Introduce a new resolution and aspect ratio like they did on the iPhone 5 (lots of recoding by developers, lots of complaints about poorly-scaled apps).
2. Make the device 2048x1536 and use the innards from a newer iPad (I'm not sure if you could actually build a screen that dense, and it would be expensive).
3. Re-use the basic gizzards from an iPad 2 and slap a smaller screen on it. Ladies and gentlemen, we have a winner.
#3 was cheaper, faster to market, and more consistent with the current product line.
Android doesn't have standard aspect ratios - any manufacturer can build any screen size they damned well please - and the OS is designed (and the majority of apps are programmed) to scale as best it can to whatever screen size is present. Android lacks any sort of real differentiation between "tablet" and "phone" apps or aspect ratios. This means that when Google/ASUS wanted to design the Nexus 7, they could look at a set of blue jeans and say "we want a seven-inch screen that, with a comfortable-to-hold bezel, will fit into this pocket".
Apple has three aspect ratios. 2:3 and 16:9 for phones, 3:4 for tablets. Given that they were building a tablet and therefore needed 3:4 or force all their developers to write another "tablet" flavor of their apps, the size of their 8"-ish screen was dictated by that aspect ratio.
As far as holding it, I've seen plenty of cases with a rear holding strap or handle for the Nexus 7. I'm sure something like that exists for the Mini, eliminating the need to actually put your hand around it. So, while I much prefer my N7 for daily use (if I can't put it in my back pocket, I might as well have a 10-incher and call it good, especially since the N10 is about the same price as the iPad Mini...), there are workarounds for our iPad-beholden brethren to carry their preferred fondleslabs around with a hand free for operation.