I use an iOS device and a Galaxy Nexus daily. Having come from a 3.7" Droid to where I am now, the iPhone screen is too small for me. It's smaller than the Droid that I bought in 2009 and used for 2 years! The Nexus, though, is as large as I would want to go because for me, it can be touch and go to use one handed. The comments about larger phones not fitting in a pocket are absurd, though. My Nexus fits just fine in my very-tight, very much girly, pants pocket. It's thinner than an iPhone too, and feels better in my pocket. That said, a 4"-4.3" iPhone would be on my radar but I will not buy it with anything less than 4".
Everyone needs to remember that screen size is purely a preference. There is no "best" size. Whatever size the new iPhone is, people will still buy it. Some will want larger and buy it anyway, some will want smaller and buy it anyway, and for some, they will like it no matter what size it is. And still, some will buy it and love it and make justifications for why it is perfect, even though they have never even used anything different and/or they have just convinced themselves that whatever Apple chooses to do is the only way that things should be done is "the best" for everybody. And to those fanboys I say...oh nevermind, it's already been said.