As a 'Pipsqueak' II driver, I agree with your assessment:
while small improvements in mileage of high sales volume vehicle will do more for the overall reduction in oil consumption than large increases in low volume cars, I object to the whole idea of trying to make large, oversized, heavy vehicles socially acceptable. I think we should spend at least as much effort on convincing people that such vehicles are not always needed or justified. Improving efficiency of such large vehicle will make people feel better (or less bad) about buying them, and we will still end up with a very high fleet consumption, much higher than if the majority of vehicles sold were of a reasonable size (and efficient on top of that). Decades ago, most folks were happy with reasonably sized vehicles. Then marketing shoved SUVs and trucks down our collective throats, and who truly needs 4WD? 95% of vehicles that have such a feature never use it. I think the rush of some companies to develop 'large' hybrids, is very dangerous. They obviously do this to preempt those companies that have been thinking ahead, from gaining too much of a technological lead (it remains to be seen how fast they can really accomplish this catching up). Yet these vehicles will be large, they will be hybrids, yes, but I doubt they will be anywhere near as technologically advanced as the Pipsqueak. This will result in large SUVs being 'ok' once again, and with only a marginal increase in efficiency (but we now have a 'hybrid' in the garage, wohooo). I really wonder if this is not mostly driven by the companies that are pushing this making most of their $$$ with large SUVs and trucks, and that's how they would like to keep things. We've all heard about the disappointing performance / efficiency of the Allison buses.
I know some may beg to differ, and this is my very personal decision, but a Suburban or Expedition is just wrong 98% of the time (there are times when they are appropriate, if used to capacity as people or gear carriers!), and making them hybrid does not make them any less wrong. One again GM & Co are barking up the wrong tree, and I just hope that little pipsqueak will continue to run up to them and raise the leg....