Any ideas what this means? What does the center pad do, why and how will it be increased in size?
Improved heat transfer from chip to PCB.
Some info on the QFN package and board mounting of a QFN packaged chip.
http://www.atmel.com/images/doc8583.pdf
Does this mean that AM implicitly acknowledged that power consumption is greater than expected?
No, that's not what it means.
The price difference at the packaging factory is probably marginal between the announced 7x7 or 8x8 mm or 9x9 mm (that's what they went for for now) QFN packages. But for board designers who have to worry about the thermal aspect, bigger is always better when it comes to heat sinks. And that's what the pad is, a heat sink that transfers the heat to the PCB.
It means AM is just trying to do a better job than their competition.