Why are polyfuses so big?
As I can see from wikipedia, a polyfuse works as that it is a thermistor where the resistance changes non-linear with it's temperature. It's designed to heat up much faster when the current goes after a certain point. That's why there is a tripping time, because the fuse has to heat up. 

I can see why they aren't in 0603 because you would blow them up too quickly. Polyfuses aren't indestructible , for sure they will go bang if you trip them with too much current. I think to make them a lot more durable, because they need some room to have enough material in place. 

Also I can imagine that the series resistance can't be very low  (it needs to heat up), and it might be difficult to produce a polyfuse with very low series resistance for it's size and current.