Apple may be patting itself on the back over its move from a 3.5-inch to a 4-inch display, but in the smartphone size race, the iPhone 5 trails the field by a wide margin. In the Android world, the 4.3-inch Droid RAZR M is considered a "compact" phone, the 4.8-inch Galaxy S III is mainstream and the 5.5-inch Galaxy Note II is large.
Why would you want a phone with a larger screen? A larger display makes videos more exciting, text easier to read, and keys on the keyboard easier to target with your finger. And if for some reason that doesn't appeal to you, the Android ecosystem also has smaller phones.