Only if you think that the market should encourage everyone to buy the most expensive thing they can afford. Larger cars are popular with manufacturers and dealers because of higher profit margins. A consumer should be able to pick a smaller, cheaper vehicle if they want it, but this makes their business less desirable. Just because there are few reasons to buy a smaller car does not mean there are no reasons, nor does it make it illogical to prefer one.
I don't know if this is an economic concept that exists, but I'd call it an "accidental cartel." Corporations noticed that serving a particular customer base was less profitable than giving customers fewer, more expensive choices, so the market participants aligned themselves around this strategy until there are no cheaper, lower margin options left. In theory, that leaves an open market for a competitor, but to occupy that niche would be to spend resources on attracting a lower-quality customer (one who is less able to pay more, less interested in paying more, less susceptible to marketing, etc).
I don't know if this is an economic concept that exists, but I'd call it an "accidental cartel." Corporations noticed that serving a particular customer base was less profitable than giving customers fewer, more expensive choices, so the market participants aligned themselves around this strategy until there are no cheaper, lower margin options left. In theory, that leaves an open market for a competitor, but to occupy that niche would be to spend resources on attracting a lower-quality customer (one who is less able to pay more, less interested in paying more, less susceptible to marketing, etc).