Depending on the situation, yes, they really can be. In short, audio is all about air being moved in waves. A bigger speaker driver can move more air with less work creating better sound in the lower registers. The lower registers (bass and mid) make up most of the needed audible range for good quality sound with exceptional vocal tones.
Large speakers aren't all about volume. Yes, they are capable of more sound but it really means they are more efficient at normal listening levels. I often liken speaker sizes to cars. Sure, your Barina will get to 140kms but it will be struggling a bit where your larger engine sized Commodore will get you there more easily, more efficiently and with less strain on the engine. It's this efficiency that will create better sound in your audio set-up.
One thing you need to look at is not the actual speaker box size but the speaker driver size. I've seen some amazing looking speakers but when the grills come off there are smaller 6" drivers in it instead of the 8" I was expecting. (Check out our blog "What's inside a speaker?")
Please don't dispair if you are not able to get the bigger speakers in your house, we have little tricks to get around this if you have smaller speakers.
Firstly, if you are after more bass to make those big explosive scenes roar, buy a big sub-woofer. The sub-woofer is responsible for that room-shaking heavy-duty special effect sound so a well-placed sub can really fill the void that the smaller speakers may leave. You can also turn it down (or off) if you are watching TV or something that doesn't need the added punch.
Secondly, if you can, switch the centre speaker to a slightly larger one. At least get it right in front of you. The centre speaker has a really important role and is often overlooked. It carries most of the voices. If you have a less than average centre speaker you will get less than average voices coming from your movies. Please don't hide it behind the TV!
Thirdly, if you are worried about the look of the larger speakers, you could think about the more discreet in-wall or in-ceiling speakers.
So would small speakers ever sound good? There are some great brands out there taking the time to make decent little speakers but you will have to pay for this technology. If you only have a small area to cover like a bedroom they can be a lovely little system.
In short, while there are some lovely little speakers out there, for maximum impact with minimum fuss, I think larger speakers sound smoother overall because they are not relying on the sub-woofer for all the bass.