I think the main crux of the counter-point is lost in your oversimplification that a smaller screen is better in all possible ways.

Nobody has argues that line - the main point has been that a smaller screen is "acceptable" as a trade-off for the other gains that the new devices is supposed to have - a better screen (not in terms of size but quality), a better UI to take advantage of the smaller screen (which makes a smaller screen not THAT bad), a better camera, voice capabilities etc.

I haven't seen influx of argumentative line which argues that "a smaller screen is better than the larger 4" screen full stop".