While medium is seldom the optimal size for a given situation, it's also pretty much never that bad or much of a hindrance, either.
Small characters get screwed over in tons of ways, I'm really shocked so many people seem to think they're better than medium, IMO they're a pretty crappy size to be. Much less carrying capacity, but many items any character would want don't come in "smaller and lighter" varieties. Smaller gear, yet it costs the same. Speaking of gear, IME you find way, WAY more medium magical armor and weapons than small. And contrary to board belief, you don't start the game with a ring of freedom of movement. The effectively -5 grapple small size imposes hurts a LOT.
Oh, and then there's the speed 20 most small races have. That sucks pretty hard, too. Yeah, spellcasters can overcome the hindrances pretty easily and benefit from the defensive bonuses. But...spellcasting makes any array of racial features pretty inconsequential by comparison, and most casters are still going to be a human for the bonus feat (unless whatever setting Strongheart Halfling is from is allowed) anyway.
As for large...pretty much anything in 3E that's large, aside from the noted LA, is not humanoid, but Giant or Monstrous Humanoid. Including even the Goliath Barbarian w/ racial sub. level. A human has the flexibility to just drink an enlarge person potion when he wants more size and str, and enjoy being medium when in cramped quarters. An actual large creature doesn't get that flexibility.