What is the reason for all Android flagship phones having bigger screen size greater than 4.5 inches?

People may want bigger Android phones , I agree since they are selling a lot. But there are also a huge chunk of people who want their phones to be around 4 inches. I was just wondering why none of the OEM did not look at this particular market potential. There are some phones available but no flagship phones with all best features is available with 4 inch smart phones.

iPhone 5 has great display,powerful processor ,LTE and decent battery yet packs itself in 4 inches. Are there any limitations in Android that prevent manufacturers from designing flagship phones in 4-4.3 inches?

I read some where there are primarily two reasons and not sure if they are true :

1. Android OS is based on Desktop OS and hence to improve resolution within 4 inches that match with Retina display would make UI elements small whereas in iOS this is not a problem since the implementation is different.Hence Android OEM's are increasing screen size and packing more pixels to overcome this shortcoming.

The claim is that when apple moved to retina display , android devices could not increase their display ppi to more than 300 ppi without getting their ui elements smaller to complete with iPhone.

[Source] http://gizmodo.com/5877084/why-android-handsets-are-bigger-than-the-iphone


2. LTE phones drain battery a lot and hence big screen phones can come with bigger batteries to satisfy power hungry LTE and other processes.For eg. Nokia Lumia 800 was smaller than Nokia Lumia 900 and only major thing that separates them is LTE. But if that is the case , how iPhone5 with LTE is managing this problem ?

Can some one clarify if these claims are true or reasons why no OEM is making a high end phone at 4 -4.3 inches ?

Update:

I want to give my reasons for why I need a top end phone not greater than 4 inches :

I have a HTC Desire HD which is 4.3 inches but my hands are of average size . When using the phone with a single hand , my thumbs strains a lot to reach the extreme ends of smartphone. that reduces my experience to great extent.

I like the iPhone 5 form factor , so will be a lot of people with small to average size hands . So it would be really nice to have Android phone at 4 inches since Android OS is lot better than iOS in many ways. I think when iPhone 5 is able to crunch so much power into 4 inch phone , Android OEM also should be able to do it right ?

Maybe lot of people who resisted from going to Android because of big screen size will come to Android.

Apologies for bringing iPhone 5 into discussion because that's the form factor people like me are looking for.