I wouldn't be surprised if this were a wifi-only device. I think a lot of people are turned off of "large" tablets, but are okay sacrificing if they get a data connection. Offering a "fully loaded" mini ipad could potentially cannibalize their standard (and more pricey) ipad sales.
I'm sincerely interested in how this (alleged) device is going to fit into Apple's device and price-point logistics. Joking aside, this does sound just like a large ipod touch. But being that the large ipads start at $499, and the ipod touch starts at $299 (and capping out at $399), there doesn't seem to be a huge price-point gap in their lineup where the 7" ipad makes a whole lot of sense.
Wifi only does not surprise me as much as the 7sh size. 8" would have made more sense, smaller than the IPad but different from the growing competition and avoids the price issue complexity. I guess Apple is counting on consumers who will just buy Apple and do not do any comparative research. It is clear that much of the tech sites have a Apple bias.