Saying "there's more space and apps can be bigger" is not an explanation for _why_ the apps are bigger.
Sounds like a great explanation. Apps tend to fill up to take all available disk space, and we've known that since 1981 or so. Every time computers got more disk/memory, apps grew in size. Back in the day you could fit most apps in a single 360K floppy disk or two.
Basically this. It's not just software, either. "Stuff takes up the available time / space available" is about as broadly applicable of an axiom as any I can think of.
It's not like it's the only factor but of course it would play some role. If you accept a higher size then all sorts of benefits follow. You can make the assets higher res, hold more of their data locally, just take less development time optimizing the app.
In large multi-app companies it leads to product decisions on bundling vs. shipping separate apps. For example, Uber vs. UberEATS.
The latter would probably benefit from being bundled in the former and having immediate access to a wider audience, but it's asset-rich as it's much more visual.
Double memory in your new computer? Great! Let's use it all up!