Mike, I think it would be in their best interest to build a smaller class of ships. Not just for the economics of the situation, rather, for the customer appeal. Maybe something between the Radiance class and the Voyager class? I haven't done too much research on the subject, however, just take a look at any RCCL forum and you will notice that probably 75% or more of the posters desire something around that size. Bigger is not always better. I am a Royal Caribbean cheerleader but I draw the line at the Voyager class ships.
As for Royal being able to shed their "bigger is better" image, I have no doubt that they would be able to. Their innovative ideas are enough to steer all attention away from the size appeal (or lack thereof).