I fit 8 dining room chairs and accessories in my Leaf.
It can be done, and it is done all the time all around the world. People just want to use their extreme case to justify both ways. We are saying “I fit my whole house in a fiat 500” and they are saying “I eat for 25 people every week so others must need it to”.
The reality is that people drive suburbans and Tahoes and they don’t even have kids just because they can. I hate to say it but the best thing that can happen to the US culture is expensive fuel. And I say this as someone who races cars as a hobby and would like cheap fuel.
I agree with everything you wrote in this paragraph in terms of SUV vs. compact hatchbacks, but I stand by the fact that if all large crossovers and small SUVs were replaced by midsized station-wagons the roads would be a better place and the drivers would lose no utility.