In My opinion, they will attract way more new customers with a larger screen than anything else. From reading these forums, the people that already love the X are not going to leave it for something else if it is a tad larger. New customers, like me, are not giving the X shot because we do not want to go to a smaller screen.
If Motorola would make a 5" phone with current LG G2 specs and all of the current Motorola ease of use features and the great Motorola reception, they could charge $500 for it and $150 subsidized and get it from current and a lot of new customers. They should be able to hit this price easily by sticking with the Snapdragon 800 and 2gb of ram. (LG G2 is currently $450 off contract most places)
I am so intrigued by the Motorola always listening features if they can get a 5" screen, I would try it from my LG G2. Check the size difference compared to the S4.
Visual Phone Size Comparison
If You took the S4 and just trimmed the bezels down to current Moto X sixe you should be at about 5.25 x 2.70 x .35 or maybe a tad smaller.
How many of you would not jump all over a Moto X with a 5" screen the size of a Nexus 4? Take My Money Motorola..errr...Google!
For the people that like the Current Moto X size and features, just keep it the same and call it the Moto E.