Maybe it boils down to an ego thing.
Men are the majority of motorcycle buyers.
I think a lot of guys look at the smaller bikes as "womens bikes", and even though they haven't riden before, they want a big powerful machine.
They figure they will be cooler on it, even though its too much bike for them.
So then who is buying the smaller bikes? Well not many I guess. I can't remember the last time i saw anything smaller than a 600 in a dealers showroom.