I suppose in this instance I agree with Jobs. There are no Android tablet apps. That doesn't mean you can't run mobile phone Android apps on a 7" Android device. And he didn't imply that. I think he was very clear in the message he gave and the audience he addressed is well versed in the products being discussed as well as what's currently available for them. This was an analyst/media event.

The pont he made well is that a 7" screen doesn't make for a compelling tablet experience and the producer of the OS itself is advising partners not to use their OS on tablet products. So consumers would be ill-advised to buy in to the current offerings. He did admit that Android is where the tablet competition will come from however.

The comment I objected to myself was the one about the sandpaper because a 7" tablet would be too small to use with normal fingers. That would certainly be the case if trying to use software designed for a 10" screen, but obviously software could be designed for a smaller screen in the same way alternative UI is implemented for the even smaller mobiles.