The iPad 2 has a screen resolution of 1024x768 with a density of 132 pixels per inch. The iPad mini has a resolution of 1024x768 with a density of 163 pixels per inch.
This means that if you design for an iPad2 you are guaranteed to have smaller fonts and elements than on an iPad mini. If you design for an iPad mini, then you are guaranteed to have fonts and elements that are too large. If you design for the middle ground then your design stinks when viewed on both devices.
As for the iPhone argument: people use media queries for a reason - they design differently for the smaller screen sizes of the iPhone than they do for an iPad.
It's essential that on a touch based device that you can work out how big things will be. Perhaps I can put this in a more concrete way: if you have ever tried to upvote a comment on HN via an iPad and accidentally downvoted the person, you will immediately see the issue of tiny fonts/UI elements.
Now make those down and up arrows 20% smaller.
As you can see from one of the links in the submitted article, even Apple's own website is hard to read on a mini. Not exactly inspiring. I'm quite surprised that such a design focused company didn't realise this was going to be an issue!
1) Why are you designing a site specifically for the iPad mini? That seems pointless. Media queries are great and all, but if you want to design specifically for touch then you should just assume a 163ppi, and that will be usable by everyone.
2) iPads typically see "full" or "desktop" websites. And they can scale. If something is too small at the default scale, then zoom in.