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Many zoning bylaws have minimum building sizes to keep the riffraff out and the property taxes up; many building codes have minimum room sizes and other rules that make it very hard to build small. By having wheels, it becomes a recreational vehicle and it can sneak under a lot of radars. But it's really tough to design a decent space in an 8'-6" wide (exterior dimensions!) space.
Andrew and Gabriella Morrison have pulled it off in their 221 square foot home and write about it (and how they live in it) on the Tiny House Blog. In many tiny houses, designers compromise on something, be it kitchen or bathroom.
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