That kind of small living requires a certain simple lifestyle. It's the same as open-concept design, where the ideal is that living is a communal and shared experience. That and not many "toys," as Plan9 points out. A kind of Waldenesque or minimalist sort of living, as I point out. Considering you could have an iPad or a laptop as your entertainment device, who needs bookshelves full of books, CDs, and DVDs? Who needs a television and entertainment unit? Who needs a computer workstation?
Many people prefer to have spaces for shared commons with several locales for privacy. At least in the West, this seems the norm. I do envy other cultures that tend to be more communal in their living, the whole idea of sharing the cooking and eating of meals as a pastime and not a chore.
I suppose I'd rather more of a balance. I spend too much time alone and need more shared experiences. I'm in a household of two, however, and so there aren't any problems with our 715 square feet.
Ideally, more space to me would be important based on the fact that I spent a huge amount of time at home. I'd be more comfortable with 1,000 square feet. I don't think I'd have a very strong desire for more than 1,200.
To me,
1,200 square feet would be "huge." I know this isn't normal in the West, but I suppose you can say I'm accustomed to urban living. It's not that I wouldn't mind a huge rancher on an acreage. It's just that I don't have a burning desire for one. Not at the moment, anyway.