Loads of reasons
Child car seats are bigger (and the law) whereas back in the day we all slid about loose on the back seat of mini-metros - therefore anyone with 2+dc under about 10 is tempted by a wider car.
Safety features generally make cars bigger - all cars are supersized compared to their 80s forefathers.
People are bigger (fatter) so seats have got bigger - some are virtually equivalent to lazy boys.
Trend towards HP/PCP type buying means people look at price per month rather than total cost.
Massive cars are normalised - people don’t think of them as huge
The market is global - cars are made for countries with bigger roads and parking spaces. Places with tiny roads still have loads of smaller cars
Hobbies/towing etc. people do more now than they used to do. Huge numbers of dogs in cars - people weren’t driving dogs about back in the day.
the penis size thing - men like big cars and lots have a “thing” about driving small cars. John Cleese drove a mini but somehow Tim in marketing claims to be to huge for a Yaris at 5’9”. Huge numbers of men associate car size with masculinity and don’t want to drive a “woman’s” car. How often do you see men in an Aygo or Fiat 500? Women still need to fit the car seats, the shopping, the dog, the harp etc in and, frankly, don’t want to be lumbered with the third rate “runaround” while himself gets the rangerover so then you have 2 huge cars on every drive.
Safety - you start to feel unsafe as everyone else is in a car that’s twice your size so it escalates. We’ll be rolling about in tanks soon (“I just LOVE the driving position! The telescope makes things super easy and I can park I anywhere!”)
I drive a big car for years when the kids were in school. I did need the car seat space, then it was just convenient with hobbies/clubs/liftshares etc. I really enjoy my small car life now but a big car made my life easier for about 15 years.