Well my point about the aspect ratio was very simple: a phone with a 5.7" 2:1 screen is the same size as one with a 5.2" 16:9 screen, so the screen diagonal is only useful as a proxy for device size when the aspect ratio is the same.
A phone with a 5.7" 2:1 screen isn't the same size as one with a 5.2" 16:9 screen, it's bigger (it has more area in real physical space). It may have the same width, but it's still more area to cover with my thumb, and for me therefore more area is out of reach. The iPhone's 4.7" has more area I can cover, but I prefer Android, so why will the manufacturers not make a 4.7" Android phone with a Snapdragon 820 processor and comparable battery life?
And yes, of course the manufacturers base their decisions on their own sales data (as well doubtless as their own market research, other people's sales where they can get the info). It's also not surprising if trends develop over time: quite apart from the message about big screens taking time to settle in the public's minds/for people to decide they have a use for such things, people are also always comparing to what they consider to be "normal". So in a world where most phones were 4", a 5.5" phone would be a freak and hence be less likely to have mass appeal. But a 4.5" one could be a more reasonable step. Then if manufacturers find that 4.7" wins some sales over 4.5", and 5" over 4.7", things will creep up for a while. And there is a limit for most people, the question is really where? In the last couple of years there has been clusterings around 5-5.2" and 5.5", and while 6" phones have been around for a while they've not become mainstream (in Western markets - more popular in SE Asia). And there are some trends that suggest this is settling. For example, LG have been reducing the sizes of their main flagships: the G4 was 5.5", the G5 5.3", and the G6's aspect ratio makes it effectively 5.2". Samsung have been bending down the edges of their flagship's screens, so while the screen diagonal may sound large the width of the phone is actually that of a smaller-screened device. And the S8 will have both of these features, longer aspect ratio and curved edges, so the 5.8" S8 will probably be no larger than the 5.1" S7. So while to naive blogs and marketing hype it may appear that screen sizes keep growing, it's not quite so simple a story.
The issue beneath your comments here is that people's hand size are not increasing with the average Android premium phone size. Apple makes a range of sizes (4-5.5") with the same modern processor yet Android phones with top-level processors (Android's equivalent of "modern processors") are rare at 5" or less. To me this is an issue because anything above 5" was called a "phablet" by phone reviewers and in polls people have said on average they prefer between a 4.7-5" phone. I see no reason to have a good battery in a phone with a top-level processor with a 4.7-5" screen, and the new phones with premium processors coming up are mostly 5.5". The Nexus 5X was a sub-standard phone compared to the 6P which was completely unnecessary considering the Pixel now has the same processor as the Pixel XL...
My fear is Android will get to a point where it can't have good battery life and speed on anything less than a 6" or 7" phone, and now I'm wondering if the Pixel 2 will be 5.2" but sub-standard compared to a Pixel 2 XL at 5.7"... *sigh*
Apple aren't immune either: although the 6 outsold the 6 Plus comfortably (the 6 already being a big step in size for the Apple market, as well as cheaper) according to what I can find on the web the 7 Plus is outselling the 7.
So what have you seen on the 6s and 6s Plus sales?
But that doesn't mean that a smaller phone won't be less profitable. Remember that I don't like large phones either, I'm just describing what I've been watching for a few years now.
Again I can't tell if big-phone sales are due to hype (trendiness/advertising/next-big-thing) or people actually want a bigger screen for practical reasons.
The Nexus 6 is an example that shows that screen size is just one variable: it was the largest Nexus ever, beyond any mainstream handset, and also the most expensive - and a big step up in cost from the Nexus 5. It's hard to disentangle two effects like that in one device. (If you think I ever said that a big phone will automatically sell better you should re-read).
The Nexus 6 could simply be an example of a too-big-step-forward for the hype-mongers; as far as I know it didn't sell well, as far as I know, for this reason, but if your point is just that the Nexus 6 is an example that shows screen size is just one variable, well that's not much more than an obvious point that I think everyone knows. Sales figures would have pointed more to a poignant point, but my point, for or against (or regardless of), what those figures may have indicated was already stated at the beginning of this paragraph.
Also this is a global business, and while manufacturers do target devices at markets it also helps if the flagships can sell globally, which means that you will tend to look at trends in all markets. The spread of the 5.5" phone is probably at least partially driven by Asian markets, where larger phones have long been popular.
I know it's a global business, I don't think anyone thinks otherwise (and I would only be amused if they do), but manufacturers don't have to target all of their phones to every country; they already don't to begin with, and I haven't seen news stories stating bigger phones only were being released in Asian countries (my news feeds includes rumors of new phones in non-US countries), so I'm not sure this is an argument. Every bigger phone rumor I've seen at best had a release in a non-US country only weeks or months before a US release or concurrently with a US release under a different model name or slightly different model hardware. The trend has been global essentially concurrently, not just the business.
As for Verizon and Sony, VZW may be the biggest carrier in the US, but the US is not Sony's biggest market by a long way - I'm not sure it's anyone's apart from maybe Apple, but Sony more or less pulled out of the US phone market for a couple of years and it remains small for them. You'd have to ask Sony for reasons (not that they'd tell you), but remember that CDMA networks only exist in North America, so serving them requires extra costs compared to the rest of the world. If Verizon didn't offer Sony a good enough deal (and Sony wouldn't be negotiating from a position of strength given their near death in the US) I could quite understand Sony deciding that it wasn't worth bothering with them. Remember when asking why a phone isn't available on a particular carrier that the carrier is involved in that as well as the manufacturer.
Sony is just an example of a manufacturer making a 4.7-5" phone with a premium processor, and I didn't ask why they're not available on Verizon, but that's a pretty big market to be out of.