Instagram, Tiktok, and Google have gotten users addicted to consuming content, and larger screens help with that.
We are helplessly addicted to digital cocaine, and so we demand large phones, and so motorola will not make money selling a small phone.
It's like the parent said: our addiction is the product, and so just like a chain-smoker will say "I want to quit" as they buy 5 packs a day, a modern smartphone user will say "I want a smaller screen and to look at ads less" as they hopelessly buy a 10 inch phablet and can't go 5 minutes without pulling it from their pocket to check tiktok.
It is not that the money from advertising flows, it is that the addicted users have already been ruined, and will not buy the devices they say they want.