For me, that means that my 0402s are all 1/16W, 0805 are 1/8W, 1206 1/4W, etc. And all of my through-hole resistors are 1/4, because the wire stock plays well with breadboards better.
There are probably 1/4W 0402s out there, but that's definitely a specialty piece. I'm seeing 16 cents a resistor/each for a 1 MOhm 1/4W 0402, which is about 4 times what I'd expect to pay for a 1/16W of the same resistance and package.
https://www.digikey.com/en/products/detail/yageo/PA0402CRF5P...
But to your point, Digikey has >70,000 0402s in 1/16W. There are 900 rated for 0.05W, and they're all exotic high-frequency/low temp coefficient/high-precision specialty parts.
Something close to this is pretty common these days; for example Vishay's CRCW-HP series are good to 1/5W in 0402 size: https://www.mouser.co.uk/ProductDetail/Vishay-Dale/CRCW04021...