Tablets can be square, at least some models.
A square tablet will be easier to hold in one hand than a rectangular one of the same surface area. No matter where you place your hand, a rectangular tablet has a corner that's farther away from your hand than a square tablet. This makes it heavier. It's called the moment of inertia — this is the same reason why a door is harder to open the closer to the hinge you push it. A square tablet will be easier to hold with one hand.
Small tablets, like the 7-inch Nexus 7, also have too small a width to use comfortably in some situations, like reading a web page in portrait mode. You can switch to landscape, but then the height becomes too small. A square tablet avoids this problem.
A square tablet is also simpler, since it doesn't distinguish between landscape and portrait. You don't need to keep changing orientations depending on what you're doing. Or deal with different layouts in different modes. Or with apps that don't support a particular orientation, or don't support it well.
The big drawback of square tablets is watching movies, or looking at photos full-screen. These work best on rectangular tablets.
So, square tablets may not be for everyone, but they have enough advantages that they should be offered as an option in the market.