Apple's use of the term "retina display" has nothing to do with the distance the display is from your eyes. The point is that, no matter how close you get to the display, your eye has trouble distinguishing individual pixels. In my experience, that's actually true with the iPhone 4.

Eh, Steve said that it was at a "normal" 10-12 inch distance from the eyes, IIRC. I agree, though, it's very hard to see those pixels, but I also agree with OP that you hold it quite a bit farther away. They'll call it a Retina Display almost for sure, if just for branding.