bleh, accidentally posted before I finished.
The main reasons I can see for the screens getting smaller are:
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the price of LCD monitors. A nice 22" display is still a bit expensive for the average user, and many are happy with a much cheaper 15" or 17" display, especially if they had a CRT of similar size.
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the resolution of the displays. Since many people still run with lower resolutions and LCDs look best at their native resolution, many people may be reluctant to buy a large LCD that either won’t look good at their chosen resolution or may display text at resolutions they feel they will have trouble reading. This, of course, goes back to the whole dpi debate…