Yes, a smaller grip size allows for more wrist action on all shots. Also, it is easier to use a smaller grip size with today's lighter racquets. Back in the 80s, when racquets were heavier, bigger grip sizes were the norm.
I used a 4 5/8 grip when I played with a 12 oz racquet. Now that I play with a 11 oz racquet, I've gone down to a 4 1/2. I find that going down to a 4 3/8 is too much for me, but I am old school (or just plain old).
TW Head Pro Tour 280 Club Member #16