It's not a question of the merits of scale x vs scale y, but a physical limitation. As we age, for most of us, presbyopia kicks in, and, to some extent, there's often a loss of some sensitvity and fine motor control in the fingers. The "between HO and O" size of S scale ameliorates that to some extent. Honestly, that is my only regret for commiting to HO when I was a child. I would rather, now, have S. As pointed out earlier, there are narrow gauge trains to be modeled which allow tighter curves for a given scale, and you could model interurban (trolleys) which give a lot of operation in a smaller space.
Take a look here, for instance: http://www.railserve.com/Models/Layouts/S_Scale/ .