Your statement:
I suspect they view the market as too small and/or it will just cannibalize sales from the high-end iMac and low-end Mac Pro side. If that's the case then financially it would make no sense for them.
Says that a "mini" Mac Pro might cannibalize sales of high-end iMac and low-end Mac Pro. If that's the case than I propose Apple discontinue offering a high-end iMac and low-end Mac Pro instead of not offering a "mini" Mac Pro.
That is nuts. People that would want a "Mini" Mac Pro would never consider the AIOs. The iMac "Pro" has a gimped Xeon. The iMac has a fusion drive, and maxes out a 8 cores @ 3.6 and a cut down Vega 56 (Vega 48).