I can think of some reasons right off the top of my head: smaller file size, higher frame rate, and increased per-pixel quality including dynamic range (which cannot be supplied by smaller pixels of similar design).There's no reason to go to a 12.1 mp sensor.
That doesn't mean much. As the 50D and pocket cams show, there is a point of diminishing returns when you make pixels smaller. You're buying into the marketing gimmickry of the megapixel war.Watch Nikon's going to go up in mp as well for the D300 replacement.
Increasing megapixels at this point makes more sense for full frame cameras, because they are not so close to the point of diminishing returns. In addition, the increase from 12 MP to 15 MP provides only a 10-11% increase in maximum theoretical resolution.
People would get a 5D II for the better image quality, full frame, etc. They'd get a 1D for better frame rate, build, etc. But you are certainly right that they would be foolish to implement all features of the 1D Mark III in a smaller, cheaper body and expect to sell more of the more expensive model.I mean just look at the rest of the rumor. Build quality of a 5D with the AF system out of a 1D? Talk about cannibalizing your own lines! That would really make people wonder why they'd get a 5D or 1D.
So it makes plenty of sense if you actually take the time to think it through.