"I also fear the fragmentation of the app market for things designed for the bigger screen and arbitrarily not available for the smaller one (as has already happened in Apple's software)."
That could happen, but if it happens a lot I'd expect Apple to change their app approval guidelines. iOS now supports dynamic layouts AFAIR so it shouldn't be a big issue for the better developers.
As for your continued phone upgrade dilemma, if you're an iOS developer there's a good argument for getting both (if you can afford it), but aside from that...
Have you used a phablet before? Small hands may not be an issue, speaking anecdotally phablets are relatively popular in Asia and Asians seem, on average, to have smaller hands than Americans. Why does this popularity exist? I'd suggest it has something to do with where you use your phone and what you use your phone for.
Ask yourself two questions...
1. Do I mostly use my phone whilst standing up or sitting down?
2. Do I communicate using voice calls much?
If you mostly use your phone sitting down and don't use the voice call features of your phone much, consider a phablet. If you're often using your phone whilst standing up, consider the smaller phone. If you use voice calls a bunch, but mostly sitting down, it's mostly personal preference (I mean, it's all personal preference, but the answer is less clear cut).
Perhaps the only way you'll resolve this for yourself is to try a phablet for yourself and see if you get on with it. Do you know anyone with a Galaxy Note?
As for your continued phone upgrade dilemma, if you're an iOS developer there's a good argument for getting both (if you can afford it), but aside from that...
Have you used a phablet before? Small hands may not be an issue, speaking anecdotally phablets are relatively popular in Asia and Asians seem, on average, to have smaller hands than Americans. Why does this popularity exist? I'd suggest it has something to do with where you use your phone and what you use your phone for.
Ask yourself two questions... 1. Do I mostly use my phone whilst standing up or sitting down? 2. Do I communicate using voice calls much?
If you mostly use your phone sitting down and don't use the voice call features of your phone much, consider a phablet. If you're often using your phone whilst standing up, consider the smaller phone. If you use voice calls a bunch, but mostly sitting down, it's mostly personal preference (I mean, it's all personal preference, but the answer is less clear cut).
Perhaps the only way you'll resolve this for yourself is to try a phablet for yourself and see if you get on with it. Do you know anyone with a Galaxy Note?