If they can standardize their whole lineup around two sizes, regular and max, then I think it will be a very hard sell to add extra work and complexity for the production lines for a smaller size that sells both lower volumes and lower price. Don't get me wrong, I love the Mini and have one right now, but from a business management perspective I can totally see how getting rid of it makes sense.
Another aspect that I think is often missed is that the Mini physically cannot offer the same battery life as other iPhones. Many say they don't mind this, but over time as the battery life deteriorates, it becomes a pain point all the same. I think that is another aspect of why they don't like the small form factor.
