The 7" size is really the sweet spot for tablets. It's big enough to make viewing things like websites, e-books, and movies pleasurable, but small enough to be easily portable and comfortable to hold in one hand for extended periods. The Tegra 3 processor also makes it significantly zippier than your older Asus tablet. I have an Acer A500, which has about the same specs as your Asus, and I notice a big difference in performance.
It's true that your phone can do a lot of the things that the Nexus 7 can do, and then some (e.g., make calls), but don't you find it a little hard on the eyes after a while, craning your neck and squinting at your screen?
Basically, you could look at any tablet as a glorified toy (which, by the way, the Nexus 7 excels at in the gaming arena). But it can also be a very convenient laptop substitute when you travel, and it sure is easy to pick it up during a long commercial break or halftime and check your email, Facebook/Google+, or even do a little work using Google Drive. $200-250 is a pretty reasonable price for this, and I think it's a humongous value compared to the $500-700 other people spend on iPads, or even the $300+ people are spending on iPad Minis.