Maybe it's driven by battery size?

All phones need to do phone-stuff that uses power, and (for any given generation of tech) battery capacity scales with volume.

If all else is the same, then: A thinner phone has less internal volume for things like the battery than a thicker phone does. Perhaps if it had the XY dimensions of an SE at this thickness, it would have bad battery life. (We all remember phones with bad battery life, yeah? It was an awful time.)

But if it's also made wider/taller ("bigger"), then: There's more volume for a battery.

And, of course: This increases the frontal area.

But because people make fun of bezels, this means that the screen should also increase in size accordingly.

And so we have it: The iPhone Air. It's both big and skinny, it does all the usual phone stuff without giant garish bezels, and the battery life is pretty OK (instead of terrible).