The Pi Pico is not a "huge form factor". It fits better on breadboard than pretty much anything with an ESP32 on it (since it's less wide), and it provides access to most of the RP2040 pins. Since the PIO can drive a lot of pins at once, this lets you really unleash the RP2040's power to do things like DVI output. Having access to more pins is something many people consider a plus not a minus.

As to your other points, I wouldn't mind more flash but I don't think the amount it has is particularly small. The micro USB, though, is a disappointment, though.