I think from Jobs' perspective, he sees the iPad as a separate type of device, and the usable screen size factors into it. iPad apps can be distinctly different then iPhone apps due to the extra space, allowing for things like Keynote, Pages and Numbers (Apple's office products) to feel more like desktop apps, and less like at a glance or minimal editing apps on the iPhone side. When you cut the usable surface area down 45%, that comes with a 45% shrinkage in valid touchable areas, and thus in Jobs' mind, the apps become slightly larger versions of iPhone apps instead of closer to desktop apps.

I don't personally see this as a big deal currently, as most of my iPad usage is in apps that would work pretty much the same way on either device. I however don't use a lot of the apps Jobs probably has in mind.

I do see developers needing to make the mentality switch from the old resolution based UIs, and towards DPI based ones. A mouse cursor isn't affected by resolution changes much in terms of usability, but a human finger is.