The timing of this is suspect. It looks to me like, because of the rumours of aa 7in device, they have gone out and asked "Would you like a 7 or 10 in device?". If you ask that, then of course somepeople are going to say 7in.
Now, if they asked "What size tablet would you like: 5in, 6in, 7in, 8in, 9in, 10in or 11in" without leading the participants, that might be worth something. Better yet, make mock ups of the tablets scaled to each size and get them to hold them and state their preference, as that might also be worth something.
Without looking at the report I don't know if they did any of this, but from the article it looks like yet another bit of useless "research" from an analyst, trying to get publicity by getting their name into an article that has the words "Apple" and "iPad" in the headline, because we all know folk click the link and read when they see that.
One last bit in my post that is turning into a rant: Accusations of Apple fans buying whatever Apple sells aside: I am sure that Apple have done their own research and, if they do release a 7in pad, they have already ascertained themselves that there is some demand for it.