Interesting discussion. It's kind of nice to be able to have choices like this, actually.
However, other than the "cool" factor, I think the 13" model is clearly the better product and here's why:
The 13" has:
-Faster processor
-Faster Bus (and memory)
-Bigger screen is better on the eyes (unless you use an external monitor)
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The overall performance of the 13" is actually considered better than the current Macbook Pro 13", when you factor in the Flash memory
-SD Card reader
-Has enough resolution to nearly equal the Macbook Pro 15"
-Can be configured as your "main" or work computer (external disc drive might be required)
-Only $100 difference between the 128GB 11" and 13" models.
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MUCH LONGER BATTERY LIFE (Most important!)
-Much less redundancy with the iPad (which will be getting multi-tasking), than the 11" does.
The 11" model is certainly impressive when you consider your getting a fairly potent MacBook in such a small form-factor. However, the 13" model is clearly superior. In terms of size, if I swapped-out your 11" with the 13" from your backpack, I doubt any of you would even notice.
However, the real kicker here is battery life. The additional battery time on the 13" model is a VERY big deal and is probably the most prevalent reason people choose the 13 over the 11.
While both are impressive achievements, I still believe most people choose the 11 either because it is very cool or they wanted an "iPad with Flash" equivalent.