I switched from a 100% layout to a 34-key keyboard last year. It's not about the desk space at all, it's about never having to move my hands while typing. E.g. instead of reaching for the arrow keys I use a vim navigation layer. Instead of reaching for the number keys -- or, even worse, a numpad way off to the side -- I use a numpad layer. And mod-taps are amazing.

The small size is nice for portability -- my keyboard is split and wireless, so I can easily stick it in my backpack and set it in front of my laptop on a table anywhere. But again, the main benefit of a compact layout for me is ergonomics rather than size.