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True, but at the time you could get a Toyota Echo or a Honda Fit or a Ford Fiesta or even a Nissan Versa which are all small cars that no longer exist.
And I see plenty of them still on the road.
Those were priced higher and comparable to the compacts like the Corolla, Civic, and Sentra.
I think there just wasn't enough demand since people would rather pay a little more to get a little more car than they need for those rare times when a lot of cargo space was needed. Additionally, tiny CUVs like the RAV4 have increased in popularity quite a bit and still get great fuel economy, further reducing demand for the sub-compacts. These cars were also marketed toward young people like college students who have a harder time affording a new car these days and would rather buy a good used one for much cheaper.
You're not wrong about any of that, much to my dismay. I was just pointing out that those cars did exist and car companies can make them. The market and regulatory conditions just don't make it profitable.
If most of the people buying cars are in their 60s they're going to want economic cars with high seats because their knees and backs can't take getting into something lower. (I can say that because my knees and back already hurt, but I'm too stubborn to stop driving my compact manual car.)