But I have kids, and am less willing to compromise on camera quality than I am size.

I’d pay the same price for a smaller phone if the camera specs (and ideally battery life—go ahead and make it a little thicker, they’re too thin anyway) were the same as the larger phones, but they’re not.

I bet those kinds of differences are what do it for a lot of folks. They’re like me and would prefer smaller, all else being equal—but all else is typically not equal, even compared to standard iPhones and not the ultra-high-end ones.