For those who didn't live through these days: the physical size of common computer monitors wasn't very different from what we have now (other than being more square, bulky, and really heavy), but the resolution was much lower; 640x480 was not just a "basic resolution", it was the standard display resolution everybody used (a higher 800x600 resolution became common later). Icons, labels, fonts, etc, were designed to be readable and look good on a typical-sized CRT monitor at 640x480 resolution. The whole user interface was designed to work well at 640x480 resolution.

At the time when 640x480 was a common resolution, the most common computer monitor was a 15" CRT, and 21" was for rich designers.