The 7" Eee really started it all for mainstream netbooks (if you don't count the OLPC XO) and it had some real appeal due to it's low price, very compact form factor, and incredibly light weight. All of these things made it attractive for the classroom, too, where little kids could carry it around from place to place, big kids could jam it in a backpack or balance it on a desk, and lots of districts could afford them.
Now, Asus have indicated that they intend to phase out this model. Should we run out and buy a whole bunch of them before they're gone? I don't think so. There is a reason that Asus is letting this model go (with possible exceptions in some developing markets where the rock bottom price is a must). I don't even think the reason is the screen (although 7" is a bit tight). It's the keyboard.
The first Classmate I reviewed extensively only had a 7" screen and it wasn't much of a problem. The keyboard, though, was quite clearly made for miniature hands and touch-typing was pretty painful. As Asus Chairman, Jonney Shih, noted, "It seems that customers prefer to have a greater screen, which also means a larger keyboard".
A move up to the 8.9" Classmate or the 8.9" Acer Aspire One really is a breath of fresh air. The same goes for Asus' 8.9" and 10" offerings. Suddenly, the keyboard just takes a bit of adaptation, rather than a two-fingered technique. The netbook becomes highly usable across all grade levels, K-12, and for adults as well.
No, there isn't a need to go stock up on 7" netbooks. Prices are dropping like flies on the 8.9" models and even many 10" netbooks are quite accessible for schools. There simply is no reason to compromise on the tiniest of the tiny laptops anymore.