They do have great internal space. And believe it or not Smart Cars are a joint development between Mercedes and Swatch. The external panels pop off so that you can mix and match colors and "looks" when you want. (On a similar note - take a look this video on BMW's new vision. A beautiful concept, but still a monster guzzling engine.)

Personally, I can't wait for the 'cold war' on US roads to finally end. This size escalation makes no sense.