All sizes of screen have a place in the market.
The first Sony Bravia I bought had (and still has) a 26" screen, which sounded big enough to me until I had to slide the set back into the corner in order to avoid wasted space where a CRT used to protrude.
After a few months, I got a 40" unit for the living room, while the 26" screen was plenty big enough for the bedroom. I have considered buying a smaller unit again (prob s/h) to use for video editing.