When we first published Pits & Perils, lots of people assumed it was a digest-sized affair because, you know, Dungeons & Dragons. The rules, which definitely took on wargaming's pretensions, were often compared to Chainmail, yet another digest-sized production; and while yours truly remains deeply honored by the comparison, our game was probably more influenced by Holmes Basic and FGU's Archworld, two letter-sized rulebooks...
The early days brought some great digests; not just OD&D but an assortment of others, all charmingly rendered in neat, saddle-stitched packages. And it's easy to see why from a purely practical standpoint. Most rulebooks aren't stapled down one side. They're folded and either glued into the binding or saddle stitched to make one; and what do you get when you fold a letter-sized page in half? You get a digest. So yeah, digests.
But letter-sized rulebooks have their own advantages; and it's not at all surprising that this was quickly (and almost universally) adopted once the money started flowing. Not only can you fit more text onto a single printed page, not to mention more charts, tables, and more ambitious illustrations (with equally ambitious layouts, by the way); they're also the same size as the notebook paper, character sheets, and graph paper you're already using.
Arduin, Boot Hill, En Garde, OD&D (and its assorted supplements), Traveller
Followed by a list of early letter-sized rulebooks, every bit as incomplete...
AD&D, Adventures in Fantasy, Bunnies & Burrows, Bushido, B/X/BECMI/Holmes, Chivalry & Sorcery, Gamma World, Runequest, (the great) Tunnels & Trolls, Villains & Vigilantes
We'll freely admit to more digest titles; but there's a palpable trend. Letter-sized rulebooks, often packaged in boxed sets, came to predominate early on; and I'm ashamed we didn't include more Chaosium stuff (Cthulhu and Elric, especially), because these were state-of-the-art productions back in gaming's youth. Oh, and those three-hole punches in B/X and 2nd Edition's Monster Manual really spoke to the expected compatibility of this size...
Which is to say, size matters. Always has. Always will. But in this time of modern (and decidedly digital) self-publishing, choices abound. We've tried to recreate the hobby's early, amateur aesthetic, and this definitely leaves room for a letter-sized style. But we've also experimented with a digest format (Diceless Dungeons, especially) and found this not only nostalgic, but also easier - proving that in life and gaming, some things never change.