You probably aren't an iPhone 4+ user.
Those of us who have owned iPhone 4 since day 1, have been painfully aware of the inferiority of the iPad 1 / iPad 2 screens for a few years now.
I have bad eyesight and need pretty strong glasses (5+ diopters). However, the screen on iPhone 4+ is so sharp it compensates for my bad eyesight. I'm able to read the iPhone 4+ screen without any glasses on, and without feeling any eye-strain. But this was never possible for me with the iPad 1 or iPad 2 screen. Without glasses, the iPad 1 / iPad 2 screen looks even grainier than while wearing them.
Last spring, at long last, iPad 3 caught up with iPhone 4 in terms of display quality. It took almost 2 years for the iPad to get there. And, sure enough, now I'm able to read on iPad 3 without using my glasses. Even so, I can still see that the iPad 3 screen isn't quite
as sharp as iPhone 4 -- but it's excellent enough. But the contrast to iPad 1 / iPad 2 screen is brutal and radical. I'm sure I wouldn't be able to read the current iPad mini's screen without glasses on -- 163 ppi is just very poor for 2013 standards.
Now, my theory as to why Apple overpriced the iPad mini so much. It makes no sense for the device to cost so much ($330) while sporting an inferior screen. My theory is, that an iPad mini with the Retina display is coming, but that the price will remain the same. And then, perhaps, it might be justified.
Why? Because the only option left for Apple regarding the iPad mini screen, is to exactly double
its resolution. Any other solution would bring lots of headaches for everyone, especially software developers.
So, Apple will do the same thing with iPad mini, that they did with the iPhone and the regular iPad before: they will double the current screen resolution. However, if they do that, then the Retina iPad mini will become, hands down, the finest screen that Apple will have ever produced on any
platform. The Retina iPad mini's screen will very likely not only have a much higher ppi than the regular 10-inch iPad 3, iPad 4 (currently at 264 ppi), but it will likely also pass and overtake the iPhone's ppi, which is a fantastic 326 ppi today.
Those of you who are good at maths can calculate this right now. 2048 pixels * 1536 pixels across only 7.9 inches of screen space -- how many ppi is this? Definitely a lot
more than on the current iPad 3, iPad 4 (with the Retina MacBook Pro lagging far behind at only about 227 ppi). Hence, the iPad mini's inflated price.