I think the big phones are:

1) To show off.

2) A battery life hack. (Number of pixels to illuminate goes up like the square, volume of the battery in the phone goes up like the cube... so larger phones will have better battery life. This was a huge, huge, huge concern on Android when the big Android devices started showing up. Remember the days when your Android phone couldn't even last 8 hours in your pocket at work? That is when the big Androids started showing up, and Apple introduced large phones after that.)

3) Most people don't use PCs anymore, so their phone is their only computing device.

These three concerns obviously weigh into the equation in addition to usability on public transit.

But really, New York is kind of unique in how over-capacity the transit system is. Tokyo is similar. Bought a Japanese phone recently?

I'm pretty sure that phablets are primarily due to demand, either by consumers or developers. Market research certainly indicates that users engage more with larger screen sizes

I'd be curious to see some study around that.

It would certainly explain a lot. The dreaded ad-driven 'engagement' obsession rearing its ugly head again.

People buy them for sure, but I'm pretty sure that market research is not why they were invented. People were not carrying around Nexus 7s in their pockets, which are not much bigger than current phablets but predated the existence of them.