I think one of the cool things about "smaller" is the ability to make creative system builds. With the right case and single good power supply, you can fit two 1080p-capable gaming machines into one ATX case.
Smaller allows you to cut down on wasted space as well. Why have a giant honkin' case with 20 fans when all you really need is to get the hot air out and away from your components as quickly as possible. Rather than trying to move several cubed inches of wasted space worth of air, you can have your graphics card and CPU cooled and exhausted closest to the exterior of your case.
Another way Smaller is better is Power Efficiency. Some ITX motherboards allow the use of SODIMM memory, further reducing the power requirements of the overall system.
Smaller is the natural progression of technology. The entire data storage of the NASA 'Apollo' missions now fits into a chip the size of a fingernail, with room to spare. Smaller has brought us to microchips that push the boundaries of the laws of physics. Smaller is the future!
1) MinITX builds are fun and more challenging.
2) Smaller footprint ( we all need more space)
3) More portable.
4) Packing great power into a small package (The PC industry has been in a mindset that bigger is better for far too long)