The RPi 0W is orders of magnitude faster and bigger than the first Linux machines I used as a desktop and even the first Linux machines we used as login and mail servers for an ISP I used to run. We handled dozens of simultaneously logged in users on that machine.
So the overhead of Linux is not the issue, even with modern Linux kernels taking up substantially more space. But the overhead of any given distro may be.
You can certainly get lots of things done with a more basic device, but at this point if the unit cost of an RPi 0W works for you, it's certainly convenient to use something like that.
That said, you can do a lot smaller device and still run Linux. E.g. the smallest device I've run Linux on (and it was no record breaker by any means) had 4MB RAM and 4MB flash, and a mid 1990's low end x86 clone.
The Transcend WiFi SD-cards that I linked to elsewhere also is a good demonstration of how small you can get a Linux machine (or could, almost a decade ago)