It basically comes down to performance and resolution.
To support Retina, Apple would need a bigger battery. When Apple makes Retina displays, it tends to quadruple the overall pixels, doubling them in on a horizontal and vertical directions. To do that with the iPad Mini it would go from a 1024 x 768 resolution to a 2048 x 1536 resolution. That would be 326 PPI versus ~263 for the big iPad with Retina. To support that resolution on the iPad Mini, Apple would need a bigger battery and a better mobile chip, say Shimpi and Gowri. A bigger battery means a heavier tablet, which undermines one of the best things about the Mini.
Apple could use a different resolution for the screen to avoid a bigger battery. To do this, they say, Apple would have "to do some scaling and filtering to hit the new resolution, which could reduce quality."
Apple could just pick a new screen size. Apple did this with the iPhone 5, but it seems unlikely it would change its mind about the ration of the iPad Mini one year after rolling it out. It would also add another level of fragmentation to the iOS ecosystem, something Apple wants to avoid.
They believe none of these options appeal to Apple, and therefore we won't see an iPad Mini next year. John Gruber, an influential Apple blogger, notes, "The iPhone went retina in the fourth generation; the full-size iPad in the third. Seems like too much to ask for the Mini to do so in its second."
While what they say makes sense, it seems almost impossible to believe Apple would wait two years to add a high resolution display to the iPad Mini. Tablets from Google and Amazon have better displays at lower prices. We don't think Apple can get away with a two years of a more expensive tablet with a lower resolution.
If Apple has to make the Mini a little heavier with a bigger battery, then it will make it a little heavier. That's what it did with the third generation iPad, and that's worked out pretty well so far.