It is funny looking back on the 5 1/4" floppies only
It is funny looking back on the 5 1/4" floppies only holding 360K of data, and that 10 MB hard drive being another box that sent on top of the IBM PC and being the same size as it! The processing speed of the IBM PC was just 1 MHZ, compare that to several GHZ now.
Then again the Apollo 11 computer believe it or not had only 38K total of memory. Most calculators that came out in the early to mid 70's were at least equivalent to it if not more powerful.
Who knows what the progression will continue to be. Now you can carry around a USB drive with 256 GB of memory and pay just a small amount for it. Also as you say the processing power and storage modern day smart phones have is huge. Even the processing power of something like the Apple Watch is enormous compared to what was in PC's 20 years ago.
I used to design integrated circuits for a living and know how much the feature sizes have shrunk. Although they are running up against physics so will be interesting to see what happens. That is one reason quantum computing is being looked at.
Getting back to the topic, for certain websites that work on all kinds of different devices and size screens are very difficult to design, and as Red talked about, a goal of 80% or 90% of devices in use present day is good. I now work in software design rather than hardware design, but do back-end software design as I don't have the patience or interest in dealing with visual things, human factors, and making it look good on lots of devices. All that takes a lot of work.
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