balance
The picture is bit more complicated than this. There is a so called Environmental Impact Assessment and Product Lifecycle Management. Manufacturers and designers use these fused with their ideologies to find the optimal size.
As for the impact:
A small product means smaller material throughput: less mining, transport of raw materials, energy used in processing, and again less energy used in transporting the final product...less energy need for the recycling process (if properly implemented) and finally there is less trash left. Bigger products mean more of all these.
As for the lifecycle:
First of all, bigger products end up being trash too even if you repair them once or twice. On the other hand there is no sense of making a device solid as Stonehenge when it is outdated in a couple of years at best. It is hard to estimate the pace of development, I know.
I have an eight years old laptop. It is solid as a brick and almost as heavy. There was (i guess) possibility to repair it but no need. I'm sure It's no surprise that it is still just a big heavy piece of trash by now even though it is running as perfectly as it did before.
There are competing interest in this for sure, not even just two of them...