Reading this article on Gizmodo by Sam Biddle reminded me of the old sketch on Saturday Night Live where Will Farrell talks into the super-tiny cell phone. The skit itself is not that funny but the part with the tiny phone makes everybody in the scene break character. I really don't like modern SNL but this one part of the skit is pretty good for a laugh.
Design is cyclical. In a couple of years phones will start to get smaller again or we'll end up with new technologies like the Pebble watch or Google's Project Glass to replace the large screens that are popular today.