I have a Galaxy Nexus. The keyboard is precisely why bigger is not better for me. Typing anything one-handed or hitting something on the upper or lower right of the screen is difficult for me; I end up letting the device rest in my hand somewhat precariously, which is extra fun when standing on a shaky bus in stop-and-start traffic.

I'm not the biggest person but my hands aren't tiny. I've been able to use other (e.g.) Nexus phones without any trouble. So from my perspective the bar ought to be higher than "we're making it bigger because we like more pixels" or whatever.