It's a good question -- is 6 inches really
I got a Kindle 2 first and fell in love right away ... with a properly formatted book, at a comfortable font size, it's pretty close to a mass market pulp novel. When the eyes are a little tired, you can bump the size up -- something you can't do in print.
The Kobo is the identical size but uses a different font (two, actually, times and a sans serif) but there is less control over the size and books and epubs are sometimes not as well formatted as Kindle books from Amazon.
Now with Kindle 3, Amazon has done away with the top title bar on every page, provided finer control on font sizes, added a condensed serif and a sans serif, and even given control over line-spacing. You can get more words per page, comfortably, than the Kindle 2 ... making it even closers to the word count of a pulp paperback.
So ... while larger screens (and colour) will benefit magazines and pdfs, for reading novels, that 6 inches is really an ideal trade-off between words per page and handy form factor. Hate to be size queen here, but 5" doesn't seem like enough (I've seen them in stores but not lived with one); Sony's 7" models aren't sold in Canada; and I don't want to pay the extra expense to go to mammoth sized 9.7" Kindle DX.