rand(i) is going to create a different sized matrix for each iteration, namely a square matrix of size i x i. That's why you are getting the error. If this is really what you want, then you can use cell arrays. E.g.,
y{i} = rand(i);
If you are just trying to generate a single random number for each iteration, then
y(i) = rand;
Or in the latter case you could just get rid of the loop entirely with:
y = rand(size(x));
