A lot depends on how far you're riding and how much peddling efficiency matters. Getting near full extension on the pedals is most efficient, but I've found that a smaller bike works better for me when I'm just noodling around town and not trying to go fast. My road bikes are around 25 inch seat tubes, but my bikes that are set to ride upright are more like 23 inches. When you're stopping frequently at intersections, I think being able to get solid footing while seated matters more than getting full pedal extension, and as you said, you don't really want any additional length.