I've known more than a couple who retired and downsized. And then regretted it. At least some of those have settled for a 7x mini-lathe as a replacement for the ones they downsized. Like anything else, they will not be perfect for everyone. There are people who legitimately need a 16" lathe with a 20' bed, after all. I'd LIKE one myself, after all. But I've got no space for such a thing, either. I've been collecting books on workshops, and workshop tips for several decades, too. One, Shop Savvy, by Roy Moungovan, had a section on the lathe he bought.
He mentioned that he'd thought he might make steam engines, and that sort of thing when he got his lathe, but that never happened. What did happen was that he used it to make and modify parts for many other sorts of projects. Custom screws, washer, and odd fittings for things he needed. He said despite not doing the engines and such, he found he used the lathe nearly every day for one project and another.
https://www.thriftbooks.com/w/shop-s...dition=4621376
There are also folks who make the lathe itself the hobby. Making tooling and modifications to the lathe. I may just have a dab of that myself. ;)
Bill