But all I see is either gigantic phones, or 3 inches phones like this one so tiny they're barely usable as a smartphone. At that point why not just buy a dumb phone?
That's much larger than the SE (4" screen, 125x60x7.5 mm, 110 g compared to 5" screen, 140x70x7.5 mm, 150 g for the 2020 SE). Which is a really nice form factor, and well suited for apps, but not so good for web browsing.
Not necessarily if they're talking about the diagonal of the phone: the SE1 has a ~138mm diagonal, which is ~5.4".
At 156mm the SE2 is a bit above 6.1".
Though by that measure the Palm here is hardly "3 inches", it's 4.2".
It's a one year old phone, but at the moment it's on the latest version of Android. Plus it has a headphone jack.
But like the iPhone, it's a greased piece of glass, so it definitely needs some sort of case.
Not by that much, but it definitely is. It's too big to use well one-handed, and it doesn't fit comfortably in a lot of pockets, especially since the corners are pointy.
The perfect phone form factor - and this must surely have been plain to anyone who ever held one - was the Nokia Lumia 620, a Windows phone with 3.8" screen and a curvy back with exchangable double-shot plastic covers. It was a bit like an iPhone 3GS in shape but lighter and with a marginally bigger screen. The phone itself was a bit crap in various ways, but how strange that we should collectively ignore the obvious rightness of this design and go on making them worse and worse for years afterwards. (I'm being flippant, but somewhere in my head I am puzzled by it all)