In forums it seems everyone wanted the 3DS Lite, with better battery life and form-factor, ideally with built-in second circle pad.
Nintendo hasn't announced how much better the battery life of the 3DS XL is compared to the original, just that it's 'better'. Better than the available aftermarket batteries?
The XL is now arguably too large to fit in a pocket. This is crucial, since once you get past 'pocket size' you have less reason not to go with a PS Vita or a tablet.
The larger size makes touch controls easier to nail, especially with the finger, which is useful for some games. Deemphasizing the circle pad pro is probably due to the games utilizing it mostly being shooters, and they don't want it to become a 'shooter system'. The people who buy a system for shooters would get a PS Vita, and trying to compete toe-to-toe with the Vita could be a big problem (the original PSP sold well but its games were mostly in different styles/genres from what the DS had.) In other words, market differentiation.
Something I was hoping for from a redesign would be better viewing angle for the 3d effect, as you have to look at it pretty head-on or else you lose the effect -- not good considering the system utilizes gyroscopes and cameras in games that require you to move the system around. And if you're on a bus or something, (I speculate) you'd lose the effect as you bounce around.
I see this as a move to give them an excuse to sell the system at a (probably profitable) $200.