The main thing IMO is that if someone finds a phantom speaker to give a superior result to a physical centre speaker, it probably points to a problem elsewhere. When Dolby designed 5.1 they knew what they were doing and part of what they were doing involved a physical centre channel. That is how 5.1 is meant to be heard. I have no doubt that some find that a phantom is giving them a better result, but if it were me, I'd try to find out what the real problem is and fix it.
You are right. I think the problem is a smaller center channel compared to the massive front LR speakers. I am not challenging Dolby's technology here. I made an observation that when I use a small center channel (compared to the front LR), the dialogue is tiny vs when dialogue is delivered by the front LR. I have no shame in admitting that I spent hundreds of $$$ before realizing what now looks obvious - audio coming from bigger speakers will deliver better depth/clarity than coming from smaller speakers especially when it has a range of frequencies like the human voice. It is possible that If I experimented with 1 or two center speakers that are the same size as the LR then I would enjoy even better audio but as of now, I am pretty satisfied with the LR doing the phantom center.
Maybe someone who has experience with commercial theater sound systems can chime in and tell us how they setup the speakers for 5/7.1. What's the configuration of center vis-a-vis rest of the speakers?