I just drive a subcompact hatchback and it’s perfect. Yeah I can’t haul a bunch of crap with several people in the car, but that’s a rare situation to even want. I can fit a fair bit in my trunk when I need to and 5 people when I need to. All with crazy high mpg for a non hybrid, an insane turn radius, and the ability to fit into tiny parking spaces.
And as someone reasonably tall, I fit fine. My wife was hesitant to get such a small car with such a tall wife, but I know a guy in the upper 6’ range who was totally comfortable driving a subcompact for years and loved the thing.
I’d prefer a bikable area with comprehensive public transit, but since I need a car I try to use as efficient as I can.