Right, phones that had 4.7" and 5.5" screens. Right now the smallest one can get is 6.1"
It's interesting that the record set by sub 6" phones has yet to be broken.
Still, Steve wasn't right about that 4" limit ... but yes, there's a point there.
And I agree smaller phones have some more practicality but I also like bigger keys as I'm growing older (gee, I'm not 75, I'm 34 but my fingertips are getting bigger or something!!) and I remember I was able to type smoothly on my 1st gen iPod Touch as a teenager and thought a phone with that format would have been perfect forever (like a slim 1st gen iPhone). Now that feels crazy to me.
I don't even think smaller iPhones (like the Mini) have zero market or aren't cool, I think they were discarded because they have to be cheaper and cost extra money for development and parts while cannibalizing pricier phone's sales, which makes no sense for Apple.
To me, recent big phones are more of a burden because weight and space in my pockets than Jobs' theory of thumb ergonomics.
Many things in a phone are a trade-off between ergonomics and features you get. Turns out a big screen is worth that sacrifice for many people. And once you've crossed the limit of one-hand usability, why not go all-in for a screen that would make watching Netflix on the bus more enjoyable?
But yes, I totally get why some people want smaller ones.