I think Apple made a smart decision to go with a larger screen. I know I switched to a larger screened android device for the main reason that you can get more done. You can use your phone more for emails because you can see more of what you type, the keyboard is bigger, so its easier to type, you can actually see website text with the larger screen. I find myself not using my ipad or notebook, and use my phone more.
I know Steve jobs probably settle on the 3.5" screen original due to wanting it to not be difficult to handle, but as you get used to the larger phones, you realize it is more useful. Although it is more difficult to use, you just need to put a Flygrip case on your phone, and it will make using your phone with one hand a pleasure. Apple should put them on as OEM. I think the small tablets are useless, go with a bigger iphone and a desktop. Thats all you need