I built a simple application for Nexus 7. I used the following code to get the screen size in DP units.
pixels = dips * (density / 160)
pixels = 888 * (213 / 160) = 1182.15.
Configuration.screenHeightDp() returns the dimensions of the available area of the screen.
Your calculated value, 1182, is close to the the height in pixels minus the navigation bar and status bar (1173) of the Nexus 7, in other words the resolution available for your app to use.
Full screen apps should be able to use the full 1280 resolution.