Why The iPhone has a 3.5" Screen

Let's also add that it is 3.5" screen with a 3:2 ratio. If you picked a different ratio by this logic, you could have a different size screen.

I do wonder, going by this logic there probably should be 2 form factors for handhelds: one handed operation, two handed with the device fitting in one hand comfortably. After that you are in tablet territory.

I'm not sure why this is phrased as iPhone vs Android like there aren't 3.5" Android devices. I own one, in fact, and chose it over the larger Samsung phones for the same reason. It's nice how the Android ecosystem caters to those who prefer devices of any size.

I have a SGSII in my hand right now and I can reach every part of the screen with my thumb. Either I have huge hands (I dont't) or the OP has really tiny hands.

Holding a Galaxy Nexus in my hand right this instant, I can hit every relative green part that the author shows on the iPhone on the Galaxy Nexus.