We happen to have a very large home (mainly because we got a “steal” in RSF many years ago) in which we raised our kids. We all have great memories of everything from birthday and pool parties to graduations, to–you name it–when it comes to our home of 20+ years.
Of course, as many others have mentioned, the lifestyle we gave our kids apart from our home are also memories we cherish, and, IMO, it’s really all about the family, not so much the house–large or small.
For those who still have younger kids going forward, a larger home might be practical, from a multi-generational perspective.
We have friends who have this situation, and have also seen stats that, more than ever, a very large number of families are living under one roof indefinitely–with kids and grandparents–especially in expensive locations. Either that, or many end of up leaving the state for financial reasons.