I'm sure you're already aware, but being bigger is actually a benefit for the beginner hobbyist market.
There is a DIP ATMega328P version and in fact it's the one used on the Arduino UNO. It's also socketed! You can program it on the UNO, take it off, and it's good to go to be plugged into a breadboard, soldered standalone on perfboard, etc. and replaced with a new one.
Indeed, for educational use cases and hobbyists, there are tons of resources available for the AVR. Being able to buy it in a DIP package is ideal, since it really lowers the barrier of entry in terms of skills and tools required. There are also tons of libraries and code examples both for AVR itself and for the Arduino platform.
True, but I think that there's a bit of an unreasonable fear of SMD among hobbyists. Large SMD components can actually be easier to solder than through-hole (and there's no shortage of break-out boards for breadboard prototyping).
