Yep. A screen's power consumption grows with the surface area of the screen (w * h) whereas a battery's capacity grows with the volume of the battery (w * h * d).

I think the dominant market pressures so far has been practical concerns like phone thickness and battery life so manufacturers - who are all also competing with their past products - are forced to sacrifice screen size options to compete. Now screen size is becoming unwieldy and screens/batteries have steadily improved so we might swing back the other way.

On the other hand, given an OLED screen, where energy cost only grows proportionally to the number of pixels receiving power, you could slap a big screen on the phone "for watching movies" but have the phone display a smaller screen centered on it (with black bars around) most of the time. I have a feeling this is the direction the industry would go, if battery life truly became a concern.