Can someone explain the logic here to me, because no matter how hard I try, it just doesn't make sense.
1) There are too many APS-C camera bodies. According to whom? They are all selling quite nicely, which is the criteria Canon and Nikon use to judge whether or not their marketing strategy is working. Does someone on this forum have some inside knowledge or secret criteria that trumps sales?
2) Canon and Nikon need to merge their second tier crop bodies with their flagship crop bodies. Why? Both seem to have found their markets and sell very well. As long as both companies recover their costs and make a profit on both bodies, what incentive is there to merge them?
3) There isn't enough room for differentiation between the 70D and 7DII. This is basically a variant of #2, but it is patently false. There is already a significant gap in features and construction between the 60D and 7D. The upgrade path for each is pretty clear: 70D inherits most of the features of the 7D, but retains the same body construction and style; 7DII inherits most of the features of the 5DIII but retains the APS-C sensor. Still plenty to differentiate them both and the full frame differentiates the 5DIII and the 7D II.
4) You can't have an APS-C body with a single-digit designation. Probably the most childish and irrational of the points. Who says? It's Canon's company and they can use any designation they want. It's a marketing tool and just like the "L" lens designation, it means whatever Canon wants it to mean. As their use of "L" demonstrates, they don't feel the need to be consistent in anything except that the designation means a higher price.
5) You can't have both an entry-level full frame camera and a flagship APS-C body. Setting aside the fact that this mysterious full frame camera has yet to surface, why can't you? If given a choice between a fully-equipped 7DII that basically mirrors the 5DIII in everything but sensor size vs. a stripped down full framer that causes all my telephoto lenses to lose more than a third of their reach, I know which I will pick. Both cameras can exist side by side because they both have different target markets.
6) Canon wants to move everyone to full frame. Well, yes, they said that several years ago. That's good marketing language, but I'm not seeing a lot of evidence to back it up. And, frankly, wouldn't it make more sense for Canon and Nikon to try to move their enthusiast, prosumer and professional markets to two bodies instead of just one. Having a top of the line 7DII and an entry-level full frame just gives them an opportunity to sell more cameras to the same customers.
Let me go back to point #5 briefly. If Canon is concerned about any camera sales being cannibalized by a bargain full frame body, wouldn't they be more concerned about the bargain camera hurting the sales of the 5DIII? If they make such a camera it has to compete with the feature set of the rumored Nikon full framer without coming too close to the 5DIII. That's a much bigger challenge to differentiation, than the challenge of differentiating the 7DII from the beginner's full frame camera.
(As an aside, how they do that, I think is pretty clear. They will do it the same way they differentiate the 60D from the 7D: Construction. The full framer will likely be an overgrown 60D in a similar composite body with a weaker autofocus and slower frame rate, but with a nifty swivel screen)