My concept on lure size for big bass is the closer you can put the bait to the bass the smaller it can be. Not that it has to be small just that it seems to matter a lot less than when you're trying to get a bass to come 10-20 feet for dinner. There are probably a lot of reasons bass bite and we've all heard the list. Only one of them is hunger so I would speculate size only matters when you're trying to get them to eat. On the other hand we all know how annoying a mosquito can be buzzing around your head. So if you can get the lure close enough they are likely to bite out of annoyance, curiosity or any of the other reasons. Put that same mosquito on the far side of the room and who cares? My take is that most of the big bass caught on small lures were caught either by people who just got lucky and put it right in their face or people who really know what they're doing and put it right in their face.
As for the finer distinctions between 7" and 12" I think Rob's right it's just a mood thing or maybe on some lakes it's matching the trout or water clarity or who knows?