My Sensation has a 4.3" screen and I have no issues navigating it. I had a Nexus One prior to that, and its 3.7" screen likewise felt fine.
I'd be willing to bet that the iPhone's original screen size was dictated more by battery concerns than the average mobile thumb length of tea drinkers in the midwest or whatever crazy metric people want to use. Bigger screens use exponentially more energy. Once that size was decided, Apple's basically stuck with it, since iPhone apps use absolute layouts and are designed for a 3:2 screen. You can't just scale the app to the new aspect ratio without stretching assets (squares become rectangles, circles become ellipses), and iPhone apps are designed against a specific aspect ratio.
Increasing a 3:2 screen to 4.3" would make the screen 2.4" wide; the iPhone's screen is currently 1.9" wide, and the Sensation/SGS II have 2.1" wide screens, by comparison. If you think the SGS is hard to use, a 3:2 screen of the same size would be downright intolerable.
Phone weight is fairly meaningless limitation in these size ranges, so battery size is mostly limited by form factor - internal components so a larger screen should give you better battery to surface area ratio and thus longer life.
I'd be willing to bet that the iPhone's original screen size was dictated more by battery concerns than the average mobile thumb length of tea drinkers in the midwest or whatever crazy metric people want to use. Bigger screens use exponentially more energy. Once that size was decided, Apple's basically stuck with it, since iPhone apps use absolute layouts and are designed for a 3:2 screen. You can't just scale the app to the new aspect ratio without stretching assets (squares become rectangles, circles become ellipses), and iPhone apps are designed against a specific aspect ratio.
Increasing a 3:2 screen to 4.3" would make the screen 2.4" wide; the iPhone's screen is currently 1.9" wide, and the Sensation/SGS II have 2.1" wide screens, by comparison. If you think the SGS is hard to use, a 3:2 screen of the same size would be downright intolerable.