I will be living in a 12 x 30 building. I see no problem with it. But I do have a 12 x 20 building that will be my workhop. I also have a 16 x 30 building that I was originally going to live in but may find another use for it. I use to have a four bedroom house and really only used the kitchen, bathroom, and bedroom.
The tiny house is a bit extreme, but with good planning you would be surprised just how well we can live. My retirement promise to myself was that I would simplify my life. It does force one to make decision. But I do have a 5 x 12 x 8 foot closet planned. Half will be for part of my stash (the rest will be in the 12 x 20 building; and the other half will be for my current clothes storage.
My workshop will also have a small kitchen using an RV oven and small refrigerator and small sink. It will have a 5 x 6 x 9 foot walk-in storage for craft supplies. I also have a 8 x 27 foot travel trailer which will be a guest house. Everything is paid for except the 12 x 30 and it will be paid off in about 15 months. I have 7 acres and enough storage space for things I do not use on a regular basis. Organization is definitely a must in a small space. For the time being I will use a futon for sitting and sleeping -- if that does not work for me, I will add a bedroom later. The main thing is I do not have a mortgage and my living space can grow as I need more.