I kept my iPhone SE and was waiting for this announcement for literal years. I only just replaced it for an XS _2 weeks ago_ (refurbished off Woot!), and I knew at the time that as soon as I caved, the new SE would come out. And here we are. If only my Wall Street bets went so well.
The small form factor is really nice to have. Some people don't want a gigantic phone, it's true. Maybe we are in the minority, but a huge phone is inconvenient at the times where you don't need a big screen. I still can't even unlock the thing without having my big dumb face directly in front of it.
The screen is gorgeous OLED and it's terrific to watch Youtube/Netflix on in bed. The camera is incredible. A foldable phone would clearly be the most practical, but I know Apple won't ever do that, and I won't switch to Android. At this point, I just have this stupid thing attached to me at all times, and I'll have to accept it. You ever try running with a damn X/XS/XR or god forbid one of the Max phones strapped to your arm?
But my point is that just because people have gotten used to bigger and bigger phones, doesn't mean that they wouldn't appreciate it being smaller 99% of the time. Like I just mentioned, running or even going for a walk wearing gym shorts with one of these devices in your pocket is pretty much impossible. They are too large and weigh too much, flailing around and whacking you in the knees. I have a battery charging case which admittedly adds more weight, but it literally pulls my shorts down when I go for a brisk walk with my dog.
So to call those who desire a small phone a "hilariously small and vocal minority" sounds to me like "people are in denial that a bigger phone is always better" when that most certainly is not true. It has benefits but I still think they should have kept the SE2 the same size (4") as the SE. The ideal solution would be a phone that can be big OR small depending on situation.
Much like the concept of a touch screen as pitched by Jobs himself during the initial iPhone reveal (context-sensitive buttons/keyboards depending on what you currently need vs. a static keyboard), you can't tell me that the vast majority wants a huge phone every hour of the day.