I'll counter your perspective with an anecdote about the perspective I first entered the game through. I didn't really care about versmilitude when I first picked up the rules. I just wanted to find something that was cool to play as for when I got a chance to join a group. I didn't know every spell in the PHB, I didn't even possess a PHB! All I knew was that wizards required high INT. You know what I saw? The Mountain Dwarf. It's key ability was that it could wear armour. Armour, something wizards lacked proficiency in.
Yes, I thought. I can be a dwarf wizard and wear armour. That sounds so cool. If I pick up the criminal background, I can also get thieves' tools. That would allow me to do most things competently.
I didn't care that it lacked an INT bonus, but I would've scrapped the idea immediately if it had an arbitrary INT penalty or limits on how much of a wizard it could be. What good is an oddball idea if you were just going to be punished for it? But it didn't have any of those, and I was so happy to play a Mountain Dwarf Wizard for my first character. Of course, this was right before the Elemental Evil season, and the group I was in immediately showed itself to be slightly creepy, so I never got to play Urist McLightningfist for more than a handful of sessions, but it was fun.
That's the angle I'm coming from. I want people to be encouraged to do strange things, and not penalized for it, because that's how I got my start in the game, was with an oddball idea. Versmilitude comes second to fun.
EDIT: Besides, Halflings and gnomes aren't significantly larger than kobolds, but they don't get an STR penalty.