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I don't know if Steve did or didn't say that, but he did say a number of things only to change his mind later on.
At the time the were designing the iPad they thought they had the right size. Times and technology change, making it possible to make a smaller tablet that doesn't suck. Had the released a much smaller iPad in 2010 it would indeed have been "just a big iPod touch". Now they can do more pixels.
There is also some marketing involved sometimes. For example Steve said they wouldn't do a video iPod and then they did. Had Steve admitted they were going to do one the sales of the current models would have plummeted.
Apple tends to deny doing anything until they have already done it. They don't announce products before they are ready to be shipped. If they want to let the public know in advance they prefer to leak stuff to the WSJ for example.
If one reads the Steve Jobs biography you'd know he tends to say no to a lot of things until he's really convinced and his no turns in to a big yes.