Tabloids are very popular in cities where many people commute by public transportation (which leaves Denver out). When you're sitting shoulder to shoulder against the person next to you, the form factor is a lot easier to deal with than something the size of a welcome mat. I can think of lots of rags which have survived in no small part because of their tabloid size -- NY Post, NY Daily News, Boston Herald, Chicago Sun-Times.

>I always enjoyed reading the Rocky Mountain News because of the tabloid-layout. The Denver Post was much more popular though when I lived there.
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>>>My theory is that before long all newspapers will be the same size: the size of your computer screen. Or your e-Reader device, or your Palm, or your iPod, or your smart phone, or whatever -- your portable gizmo with connectivity. I have been having this debate with my best friend, who is a well known Tribune writer, for about five years now. He thinks I'm a technology crackhead. I think he is in denial. I can't wait to tell him how wrong he was [g].
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>>I sure hope you're wrong. There's something truly pleasurable about sitting down at breakfast and opening the morning paper, propping it up to read and the like. The thought of trying to read it on a tiny screen is horrifying.
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>>Tamar