From a performance standpoint, the highest performance wheel is one that is large enough to just barely clear the brake caliper and rotor and no larger. Hence, the tiny wheels used in F1.
As Ryan and other mentioned, maybe people select wheels from an asthetic standpoint so there are many other factors to consider.
OEM's are simply following the bigger is better thing that consumers demand. Back in the 80's a 15 inch wheel was considered cutting edge and massive. Now a 19 is the new standard, and many cars come with 20's from the factory.
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