Yeah, it was a power/performance issue.
Basically, to ensure compatibility with 10" iPad apps, Apple had the choice of fitting the Mini with a 1024x768 screen or a 2048x1536. If they would have chosen a resolution in the middle, like 1536x1152, graphics would have looked blurry and pretty shitty overall, and it would have meant that app developers would have had a third resolution that they'd need to scale their graphics to.
A 2048x1536 resolution display is very power hungry, and it needs a powerful SoC to drive it. Apple may be able to put a retina display in the next model, assuming they can die shrink the A6X SoC that powers the iPad 4 and fit the next Mini with a low power IGZO display, but it's not certain whether they'll be able to pull that off. As such, it's possible that this year's model will be little other than a spec bump, which would be massively disappointing.