I'm working on a postage stamp quilt, where my squares are 1.5" finished. I'm chain piecing by machine. I personally won't do it by hand, because the size is so small, I would be afraid of it coming apart due to not being able to have 10+ stitches per inch... With 1" finished squares that's very few stitches holding it together.
But I guess it is doable as many great-grandmas made postage stamp quilts by hand.