This fact by itself doesn't mean the bike is too small, but perhaps that the seat tube angle is too steep. If the STA is good, then with the right seat post and saddle and stem you should be able get set up right, within a certain range. Maybe you just need a more laid back seatpost. I'm not saying don't look at a real road bike, but maybe you can still make this rideable as a utility bike with something as easy as a seatpost swap. Try the kalloy uno 374 from wallingford, quite laid back at a good price:
http://www.wallbike.com/seatposts/uno374.html
Note, the kalloy uno posts most bike shops stock or can order are not as laid back as the 374. And its only $23.




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