That's fair enough, but many people will enjoy having access to economical transport without sinking tens of thousands of dollars in to a depreciating asset.
And while people sometimes appreciate a lot of space in a car, most often, when they commute , they might not need that.
In ~15 years of car ownership, I have never owned a car less than 10 years old, and I don't understand this at all. Currently I drive a 2002 Peugeot 307. Regular maintenance costs me less per year than the depreciation cost alone on a new car, and I've never had a breakdown that's left me stranded. Not once.
But anyway, my point is exactly what you say: the risk of having a breakdown is small enough for any well-maintained car that it's pretty independent of car age.
I have always been surprised that car manufacturers haven't done a better job of rolling regular maintenance expenses into the initial cost of a car (and thus, into the financing arrangements that support most new-car purchases), because doing so would appear to be something of a win-win: a more reliable car for the consumer and also a more reliable-seeming car for the manufacturer to tout. But I think the mandated separation of auto manufacturers from retailers and servicers in the US tends to conspire against this.
Our experiences differ. In my own, they own a car. They just wind up impoverished as a result.
The only exception is in places with good public transport and cycling/walking infrastructure in human-scale development, but those places tend to be pretty pricey.
If you can let your self-driving car drive uber and get you something like $10/hour while you are at work, I think some people would do this.
I think cars being as large as they are has absolutely nothing to do with a size of the engine. There are some cars with absolutely tiny 4-stroke engines and they are still "large" because anything smaller would be unstable on the road. You can't make a cabin for a single person on 4 wheels, because it will fall over in any turn - you have to make it a motorcycle, or a tricycle - and you are losing a lot of things that make a car a car at that point. Not to mention the fact that I don't want my car to be a tin can - I want to be comfortable.