It's a win unless you don't care about the downgrade in graphics performance (nVidia > Intel GMA) and power consumption (Core2 > i7). In these regards the latest model looks like a downgrade, at least on paper.
I'm appalled that noone seems to notice or care about those things, especially power consumption.
Graphics performance: http://www.notebookcheck.net/Mobile-Graphics-Cards-Benchmark...
search for "NVIDIA GeForce 320M" and "Intel HD Graphics 3000". Intel has a history GPU's with poor perfomance and feature support.
Power consumption: on this very table, look at TDP http://ark.intel.com/compare/54617,54618,56858,36697
Pentium M(2004) = 5W http://ark.intel.com/products/27609/Intel-Pentium-M-Processo...
Core2(2008) = 10W
i7(2011) = 17W
Despite the shrinking of the electronics Apple even had to raise weight a little in the latest model, to accomodate a battery large enough to provide the same "5-7" hours of runtime. That's when you are mostly idling or browsing; I'm sure the new Air will run hotter and shorter if you utilize your CPU closer to 100%. Well, customers want an "upgrade", and there are no better parts available; what else can you do?