The 505 is NOT a downgrade from the 700, as you finally realized.
Regarding the 300's screen, it seems most of these comments come from a brief look at one, or even just hearing the size and thinking it's too small without even using one! Au contraire, I find the 300'[s screen size to be great and it may be even easier to read. Why? Because the lines have about 5/6 the text of the same document on the 6" screen. There's less side-to-side movement of the eyes, similar to (but to a lesser degree) reading columns of newsprint. I think it is slightly more 'comfortable' than the 505 for sustained reading. BTW, this is based on actually reading hundreds of novels on the 500 and 505 over a couple ofm years, and a few dozen books on my 300.
I'll bet if, for some reason, some ebook devices were made with 7" displays, and then a company came out with a more portable 6" version, many folks here would say "oh no, I looked at it in the store (or read the specs) and 6" is too small for an ebook display."