I have a 12" MacBook. In fact, it's subbing in right now as my secondary desktop, since my 2007 Mac Pro is on the fritz. I have the MacBook mated to a 30" Apple Cinema HD Display. It's glorious.

It's a Core m3-7Y32 2017 model with 16 GB RAM, and the performance is very good for what I need it for.
However, there were four main problems with the MacBook as I saw it, so no wonder it wasn't popular.
1) Ports. It just has one USB-C port and a headphone jack. The single USB-C port has been repeated source of frustration to me. It's really irritating. It needs at least two USB ports, and it's no surprise the M1 Air has two USB ports. Plus, the single USB-C is not Thunderbolt. This causes even more frustration, because it limits its usefulness. However two USB 3.1 ports would have been better than a single Thunderbolt 3 port.
2) Price. It shouldn't have cost so much more than the bigger MacBook Air.
3) Keyboard. The 2017 has a significantly improved keyboard over the 2015, but it's still not great. After all these years, I'm still not impressed with the keyboard. Furthermore, these keyboards are notorious for having problems years later.
4) Trackpad. The 12" MacBooks have noticeably inferior trackpads to the MacBook Pros. The feedback click strength for that trackpad is noticeably weaker than the 2017 MacBook Pros. I like strong feedback and the MacBooks at the max strength setting are about the strength of medium or less on the MacBook Pros. I know it's not just my unit, since I've tested several store models with the same result.
AFAIK, all of these were addressed with the M1 MacBook Air (although I'm not sure about the trackpad since I haven't had much chance to test that part).
Would I buy another 12" if they put say an M2 in it? Well, probably not now, since I'm working from home 95% of the time. I no longer need a laptop. If I did though, I'd most definitely get another 12" for the form factor and lower weight, but only if the above problems were addressed. I could see the weight going up somewhat but I wouldn't want the bigger 13.3" form factor. Perhaps what would be good would be a 12.5" model with thinner bezels.