Back in the day, I definitely saw the appeal of small 4-cyl pickups, and we owned several. My dad also had full size pickups for his construction business, but in his later years his personal truck was almost always a small pickup -- remember the Mazda being very nice, but Isuzu, Mitsubishi, Toyota, and Nissan all made great small trucks back then. In later years, the smaller companies stopped making trucks, and Mazda rebranded the Ford Ranger, Isuzu rebranded a GM, and Mitsubishi rebranded a Dakota. That was quite an industry consolidation that took several of the nicest small trucks off the market, replacing them with mediocre re-labeled domestic trucks with confusing trim, odd looks, and no brand identities. Only Toyota and Nissan remained doing small trucks on their own. While they still offered 4-cyl models, they went in a different direction emphasizing V6 models.
Ultimately, I think it was improvements to full size trucks that made the remaining smaller trucks less appealing. I mean, my full size GMC Sierra 4x4 Crew cab V8 gets 19-23mpg routinely, and can out-tow and out-haul any small pickup on the market. If a smaller Toyota or Nissan with V6 got dramatically better gas mileage, that would be a compelling reason to consider one, but they don't, and in fact they were rated *worse* the last time I looked. And last time I drove a Tacoma, the ride and handling were so awful, it didn't even drive like a small truck. That combined with improvements to ride and handling in full size trucks took another advantage away.
So I think the automakers shot their own small truck ambitions in the foot in several ways, both in product/brand strategies and in making full size trucks so much better and more acceptable as daily drivers.
Will be interesting to see how the new Chevy/GM mid-size trucks do. They are nice -- I looked one over and went for a ride last time I was in for service -- but I don't really see the compelling point. I do think they will eat Toyota and Nissan's lunch until they can (if they even bother) modernize their small trucks. They are both way behind at this point.