Earlier quoted context omitted.
And we'd have a retina Macbook Air...
We do: https://www.apple.com/macbook/
The Macbook 12" is an underpowered Fiscer-Price-like toy with a crappy keyboard and one (ONE!) USB-C port and nothing else... well, except a good screen.
The current MBA is a text-book example of an intentionally under-specified product designed not to undercut the more expensive offering. If they put a good screen into the MBA form-factor a lot less people would buy the MBP. People who can't innovate their way out of a paper bag are terribly afraid of cannibalization of existing product lines. Jobs wasn't.
One of the great things I think he did was to introduce the MBA and to drive down its price point so that lots of people could and did buy it. For all of his faults, I think he did have a democratic kind of vision that great computers should not be reserved for the rich.