Jetta, Corolla, 3-series, C-class, etc are all compact sedans in the US. The step up (5-series, E-class) is mid-size, and the step after (7-series, S-class) is full-size.

Things like the Yaris, Polo, Fit, 1-series, etc are all subcompacts.

North American cities are largely planned around cars as opposed to having bricks thrown down wherever horses used to walk, gas isn't nearly as heavily taxed, and historically steel was never anywhere near as expensive as it was in post-war Europe. So there's no need for small cars like there is in Europe, and people like the comfort and practicality of larger vehicles.