I think it's more a case of the companies saying "what you want is a bigger, shiny screen so you can use it like a computer, nobody has small phones anymore, don't be left out"
They have gone from a useful accessory, to a status/fashion symbol where bigger and faster is always better*
* For a given value of better
(Obviously some people actually do want bigger screens because they need it for things, but I would say they are in the minority)
But if I look around, I see a bunch of crappy big screens around, because "bigger is better" right? And sometimes, those bigger screens really are crappy. Some of them are decent quality, but they tend to also cost a packet, just like the iPhone, but not as crazy expensive as an iPhone. Still there are a lot of big crappy screens to be found around.
It's not people who changed their mind, it's Apple.
Most people never wanted small smartphones. It's particularly true in Asian countries. When I first came to Korea in 2010, some people jumped on the Galaxy Tab, because it was the first Android device that was big enough (and believe me, it was terrible tablet in many ways, and even worse a phone).
Apple probably doesn't want to bother selling niche products in highly saturated markets anymore, especially given that the SE was also a lower margin model. For one American/European consumer that is unhappy, they'll probably sell ten iPhone Xr's somewhere else.
[1] https://9to5mac.com/2017/11/20/iphone-x-how-to-enable-reacha...