I’m not saying that this is people’s preferred choice, I’m saying it’s a logical decision given the choices available that seems counterintuitive from first principles (and assuming a market with real choices).
I am the small-phone-lover this article is addressing, and I did sign up to their list - I have an Xperia XZ1 Compact and no plans to upgrade because there's nothing to upgrade it to - but my biggest complaint about the Compact is that it's too big already. I'm a not-quite-six-foot man and I can't reach to buttons in the corners one handed. So why bother? It seems that my preference is not entirely rational after all.
The actual market for a truly one handle-able phone is enormous. It's just not possible to fit modern phone functions into a package that small though.
Who will pay flagship prices for a phone with 3 hours of battery life?