50% of the population has hands that are too small to operate a typical phone with one hand. It's ridiculous that there is nothing for such a huge number of people.

Most people take what they're given. Whatever is on the shelf or the front page, that's what they buy. Manufacturers make bigger screens because it's impressive and good for delivering content and provides room for cpu & battery, and most people just go along with it. They think about products the same as the weather. Whatever is, is just what is, like it's just part of the world, not something that people made and people can make differently. If there is choice available, they buy what they were told to want.

Sales numbers are not a strong argument in an environment like that. Countless things sell in huge numbers without anyone actually liking the product or service, even when there isn't a hard monopoly like your cable/internet.

There is a whole other big perverting factor too, which is that for many years now a phone is many people's only computing device. They are preferring phones that are larger that they'd really like for a phone, because they can only have one, and need it to do every job that you and I use a laptop for.