I guess my hands are small, because I've had no problems writing on an Acer Aspire One or an eeePC 701, or even my TF300's docking station. Tablets in general have an advantage because you can get bluetooth keyboards that're closer to full size, and use one of them. People might laugh, especially if you're like me and set your tablet up on a picture easel, but it works.
Trying to write on an on-screen keyboard is an exercise in futility. Been there, tried that.
The issue with screen space is IMO because people aren't designing their apps with smaller screens in mind the way they did when the only commonly-available GUI had a 5" screen at 72 DPI. We've gotten used to having way too many features for a simple writing app, with all the menus and bloat that follow. At some point, someone is going to end up developing a "gold standard" tablet writing app that sets the design language for future ones, the way MacWrite did for conventional word processors.
I've got a hunch it also relates to designers setting default font sizes for a 96-DPI screen, instead of a percentage of available screen height.