Marco Arment, Instapaper creator and publisher of The Magazine, has enough time in his busy schedule to write on his personal blog Marco.org. Yesterday he took the time to put some thought into why the iPad mini doesn't have a Retina display, and notes that it comes down to two things: money and power.
It's not that he dislikes the iPad mini. He loves the small form factor and external design, how cool it runs, the fast charging of the device and how the "Smart Cover even sticks to the back better when it's flipped around." But the lack of a sharp Retina display is apparent to him when he turns on the device. That's why he refers to it as a "conflicted product."
He notes, however, that the "Retina iPad screen is a much bigger power hog than a non-Retina screen of the same size," and the practical result of what a Retina screen would do to an iPad mini is: "Its battery life, portability, or performance would suffer significantly. (Probably all three.)" Add to that the higher component prices required for a more powerful battery, the Retina display itself and the heftier GPU required to drive the display, and the price would possibly start at $399 instead of $329.
So, as Arment concludes, "That's why we don't have a Retina iPad Mini yet. It's not only about price: it's because the resulting product would suck in at least two other important ways."