The bigger phone trend actually started in Korea, and spread to China. It was several years before large phones came to the United States.
My goal was for it to just last me until the 12 came out, but I'm still on the fence about whether the better camera (and water resistance...) are worth the additional bulk.
Part of this is because a smartphone is a "primary computing device" in those countries, whereas Americans tended to have tablets, laptops and TVs as well.
There are obviously various profit motivations. Bigger phones are easier to throw more tech in since you're less constrained by physical size while also making the devices thinner. There was also no risk of losing market share since nobody makes smaller phones anymore. And lastly, most people still bought the product that was available.
I am excited to see this return to a smaller form factor. I hope we can get a Pro model eventually and decouple budget and size.