We started out with a 26' TT, and the kids slept on the dinette and couch - and we grew to hate it. I always wanted to use the dinette after they went to bed, but couldn't. Doing anything in the TT seemed to disturb them - getting a snack, for example.
We upgraded to a 32' bunkhouse and loved it. The kids have their area, and we don't disturb them - or have to break down and set up the table every day. We are actually upgrading again to a 36'.
Even though we prefer (them) to be outside, there are days where it rains, people are not feeling well, etc where you will be in the trailer, and it's much more pleasant when everyone has enough room.
Also, the longer TT usually means more storage, which we now greatly appreciate.
Just my $.02.