I hate Samsung, but the S3 is selling extraordinarily well for an Android flagship. I think most people genuinely want a bigger screen.
You can use that same reasoning for the iPhone. The iPhone is selling much better then the S3 so that means most people prefer a 4" screen.
In reality it's based on personal preference. People have options which is what is great about competition. Those that like the large screens can go with android those who prefer a 4" screen can go with the iPhone.