No way did "smaller" rooms wipe out "kitchen" music. There's way more square footage of housing per North American than there ever has been before. I would guess that smaller families and dishwashers are more to blame. As well as television, stereos, radios, movies, telephones, increased ethnic diversity, increased wealth that allows families to be apart more, increased wealth for heavy furniture that is stuffed into our houses and can't be moved aside easily for a dance, increased mobility (so that you don't HAVE to socialize with your neighbors anymore or routinely invite them over -- heck you CAN'T invite in a small fraction of all the people who COULD come over),... in short all the new ways we entertain ourselves make it less likely that there will be neighborhood song and dance parties at anyone's houses.

Still you do have a point -- fewer of the big houses today have any room designed with occasional dances in mind. With a car, it's so much easier to go out to dance.