It is disappointing that there aren't many small high-end smartphones. Obviously it's more difficult to pack the latest technology in a smaller package. But it seems like it's a market much less flooded than the 5+ inch size phones. Maybe someday companies will start marketing "ultra-phones".
I hope so. I'm old enough to remember the time when smaller meant better, and miniaturization was a sign of progress (Hell, to me the first iPhone, for all its wonders, seemed at the time way too big).
Maybe one day people will re-discover the appeal of the candybar and slim-flip form factors, who knows.
Smaller means better when the thing is big for no conceivable reason. It's not a universal truth. Smaller was better with phones for a long time because the phone was much larger than a the screen, and it didn't need to be. Now, the phone is the screen. And with screens, bigger has always been better. TVs keep getting larger, as well as desktop monitors.
Whether it's for functionality or for status, bigger is better for a lot of things. Phones were the odd duck because the screens were tiny back then.