Been reading a lot of the comments here. One thing overlooked is that many people can only afford ONE vehicle. So, for example, if you have to haul a trailer or boat occassionally, or pick up some plywood or drywall at Home Depot, or take the entire family and all their stuff on a trip, at some point it makes sense to buy a larger vehicle.
Sure, if those things happen very infrequently, then you can get by with a smaller vehicle and rent something for the occassional need. However, renting is much more expensive than owning, and its often inconvenient.
Everyone is different, but there is some level of need where it makes financial sense to buy the larger vehicle and bite the mileage bullet.
For example, I'm remodelling my house. I live in NE Ohio, so 4wd/AWD is a big advantage for about 1/3 of the year. Most of the time, I could live with a 2wd midsize or even compact car. However, at least once a week, I need my truck bed, and for 1/3 of the year, I need 4wd or AWD. I bought a used Sierra extended cab 4wd pickup. It meets all my needs for all of the year.
The best solution would be to own the truck and an econobox and drive whichever makes more sense, but for the same price as my newer truck, I'd have to buy two older vehicles and be constantly maintaining them.
As someone mentioned, if full-size station wagons (capable of carrying a 4x8 sheet of drywall or plywood, like the old ones were) were still availble, I'd have one of those. However, they were driven out of the market by CAFE standards, so now I have to buy a truck to accomplish the same thing - law of unintended consequences.
Sorry for the double post - don't know how it happened.