Just to clarify on thing here: The Nexus 7 LTE ca NOT make phone calls, no mater what rom you put on it as it does not have the hardware to do it. This is all part of keeping the price of the device down.. But hey. I Use SIP App all day long with NO problem to use it to call with!! I dont get why everyone HAVE to call with the GSM network when SIP is just as easy and cheaper.
Unless you have money to throw away the 3G/LTE version does not make much sense if it cannot make and receive phone calls.
The reason why people want to make ordinary phonecalls and SMS is because (a) they already have mobile phone plans giving them free minutes and texts and internet (b) they have a phone number which other people can ring (c) they have a phone number which they want to appear on the other side for outgoing calls (d) relying on wi-fi to make phone calls means you have to be near a wi-fi station - not very practical (e) why pay extra cash to buy another SIM + plan just for internet data on the Nexus when already your phone's SIM gives you as much data as you can use (f) when you are abroad many times the internet is problematic but there is almost always 2G reception
A possible use for the Nexus would be to buy the much cheaper wi-fi version, and tether it to your phone when you are outdoors. Unfortunately this really kills the phone's battery and you have to suffer the inconvenience of carrying two separate devices.
I am confident that within the next few months we will see phones with 7" or more. Currently the biggest is the Galaxy Mega at 6.3" I think, and may be some Chinese makes at about 6".