The current iPhone fits in my pockets - not super amazingly well - but it just about fits. Any bigger and it wouldn't.
I'm going to wager that if and when Apple releases a larger screen, larger sized iPhone, you'll suddenly find a way to fit it into your pocket.
The second a mobile phone becomes less mobile is the second a mobile phone manufacturer needs to have a sit down with themselves and rethink their priorities.
It is a mobile phone. Not a tablet, netbook, laptop, desktop, TV, computer monitor, etc. A mobile phone first and foremost. If you want a bigger iPhone? Keep your current phone and buy an iPad.
This makes little sense. The size of a phone doesn't necessarily equate to whether it can or cannot be a mobile device, especially when we're talking about changing the size by ~1 inch.
Also, whether you use the extra features or not, smartphones these days are becoming more than just a "mobile phone." They
are computers, televisions, gaming platforms, etc. Otherwise, the App Store, streaming data, constant attention to things like camera, video, maps, sharing, cloud storage, etc. wouldn't be such a focal point. Just look at Siri, which Apple touts is your personal assistant who helps with setting up appointments, reminders, looking up restaurants and information, and so forth.
If all you want to do with your iPhone is make calls, that's your choice, of course. But the whole "it's a mobile phone so it needs to remain the same size" is an absurd argument in every way possible.
EDIT: I see you've followed up your post with this:
Also, people who complain about watching movies/playing games on an iPhone are hilarious to me. Those things come secondary to it being a mobile phone.
If you're buying a phone to watch movies on, then........... well, I'm not allowed to say what I think of you on here, but it'd be like buying a car to walk to the shops in. It doesn't really work. Sure, you can do it, but it's daft and when you complain people aren't going to be that sympathetic.
Is it also hilarious that Apple's own marketing constantly pushes the iPhone as precisely more than just a mobile phone? When was the last time they talked about the "phone" features? What are they constantly pushing actually? It seems to me they're far more interested in talking about apps, their camera, SIRI, soon-to-be new Maps system, Safari, music player, pictures/video playback, reminders, ebooks, movies and TV shows from iTunes, etc. -- it goes on and on.
Secondary or not, it's not at all "hilarious" to regard these features as important to a mobile device in today's day and age.