Fast forward today and nearly every phone looks like a galaxy note. Turns out when the utility is there, people will adapt.
I still think this is correct. "Features" like Reachability, and even Screen Time, are software solutions to hardware problems.
I don't think people would be as addicted to their smartphones if they stayed small. At that size, they were more of a tool, and a means to get something done when away from a proper computer. As the size increased, it became mobile-first, doom scrolling entered the picture, and people started asking if phones were bad of our mental health.
But even people I know with smaller hands generally prefer larger phones, probably for the same reason most PC computer users prefer larger monitors rather than the 14" monitors of yesteryear.