We downsized over 11 years ago, going from a 2500 sf to a little over 900 sf. However, we gave up sf living area for land. We went from subdivision living to 20 acres of breathing room. Sure, we'd love to have room to entertain indoors more easily. When out of town guests come to visit, we find it hard to accomodate with our one bedroom/one bath. But, if we're entertaining outdoors, we have great advantages. Since we have relocated to the country, we aren't forced to keep our yard to certain specs, either. That, in itself, is a blessing.
We still have "stuff" boxed from 12 years ago. Our children will probably inherit it all in that very condition.