You're being deliberately obtuse. What would you be saying of the GS3 had a 4.7" screen since you wouldn't be able to keep throwing up that 0.1" is "larger" to the point it makes a difference? You are also using the word "usable" in a way that really requires another posting of Inigo Montoya's photo. Let's put them up side by side:
http://img854.imageshack.us/img854/2034/screenshot2012071023044.png http://forums.androidcentral.com/at...-them-here-screenshot_2012-11-30-13-07-59.png
Almost an entire row's worth of space is thrown away by that giant button bar AND IF THE NEXUS 5 CAME WITH A FIVE EFFING FOOT TALL SCREEN, THAT BIG BLACK BAR WOULD BE
WASTED SPACE!!! The Moto X makes that bar translucent so you can see the wallpaper, but that's a dodge - it's still wasted space and while Google has tried to cajole people since ICS to use soft menus, the fact that pretty much every single maker is refusing in favor of some sort of button arrangement under the screen indicates all the makers recognize that to their customers, it appears as wasted space. That means it's NOT USABLE. I'm not even getting into the mandatory Google Search box that should be a widget placed where the USER wants it or relegated to Google Now.
You also say
"said buttons disappear when viewing full screen media" to which I ask: WHICH APPS? Running through Facebook, Flickr, Reddit is Fun, Gallery, Google+, Chrome, Tapatalk 4, IMDB, Flipboard, Amazon - none of them make the nav bar disappear. A couple reduce it to three dots, but the app does not expand. Only YouTube in landscape fills the whole screen. When the overwhelming majority of apps do not do away with that 96 pixel block of UNUSABLE SPACE - sorry, but being used as a button does not make it "usable" - then the advertised screen size is moot. In the old CRT days, they used to have to state what the "viewable" area of a display was (e.g. 17" - 16.3" viewable); perhaps we need to treat that nav bar as part of the bezel. By my measurements, that means the N4 has a 4.3" viewable screen, a full half-inch less than the GS3, the same as my OG EVO "4G" from three years ago. (A half-as-tall nav bar would bump visible size to a bit over 4.5" - marginally better.)
That's a BIG marketing problem that even a larger screen won't fix because the big tall wasted space bar at the bottom will only scale up at the same proportion. The point as I've said all along is that people hunger for larger screens because the Nexus 4 gives up so much space with its too tall nav bar. Now I don't expect Google to go to hardware buttons just as they won't have expandable memory no matter how much the nerd ragers whine EVERY. SINGLE. TIME. one of these Nexus devices arrive, but the only thing preventing a half-height bottom bar, same as the top, is obstinence with perhaps a little bit of not wanting to make things even harder for developers to cope with regarding screen sizes.
tl;dr version: It doesn't matter how large you make the Nexus 5 if you have a big tall block of wasted space at the bottom. Period.