Obviously if you have an iPad that would be your go-to device. Just like if you were sitting in front of a TV, you'd no doubt set the iPad aside. But the only reason not to use an iPhone for watching movies is if you personally don't care to. If you hold it at half the distance as an rMini, it's going to appear to be the same size.
I do quite often when my iPad isn't on hand. I've watched entire seasons of shows on my iPhone in airports. The same when on a short trip laying in bed. I even have an iPhone 4S with a 3.5 screen (gasp!!).
AppleTV > iPad > iPhone. Is my Apple media watching order.
I used to travel a lot and the portability of the iPhone is still best. Yes I always use it to watch videos, movies, etc.
Nowadays with an AppleTV and AirPlay the only thing you will regret is having to plug it in to re-charge the battery.
We've come a long ways!
I remember watching season one of LOST on my iPod Video before the iTouch was released!
I'd do on so my train ride home from San Diego to Encinitas. It is now weird to think of looking at a tiny little screen like that and not being distracted while doing so.
The original iPad was a giant upgrade back in the day!
Naaaaaw the iPhone screen is way to small to enjoy a movie. I guess id do it if I was one of those unfortunate people who have to do a great deal of travelling via public transport back and forth to work each day. Having to travel a lot really sucks so its a good way to avoid eye contact with the crazies I guess.