A smaller Model X would have been more the volkswagen of the 21st century and the people's car is what Tesla intended with the Model 3. Families could make a Model X2 the family car competing with SUV's (today's station wagons) and vans which are probably 75% of the 21st century "family car". A Model X2 would cover 100% of the market while a Model 3 sedan covers 25%.
I believe that your mistake is when you equate "car for the masses" with "family car". A "car for the masses" would be a car that has appeal to the most amount of people possible; a car that has "mass appeal". A "family car" would be one that would appeal to the singular demographic of "family", which would automatically limit it's "mass appeal". The fact that you keep using the original Volkswagen as the template for a "car for the masses" only highlights your error, the original Volkswagen wasn't a "family car". Claiming that, it being the 21st century, somehow changes the dynamics of what constitutes a "mass appeal" vehicle would seem to be a further error on your part. For the shift to a "family car" being the vehicle with "mass appeal", that would require there to be a whole lot more families or families have become larger than they were in the past and the exact opposite is true.
The reality is, for a vehicle to be a "car for the masses", it has to appeal to the widest spectrum of the population as possible, such as college students, retirees, unmarrieds, empty-nesters, commuters, grandparents, parents, and yes, families. A small SUV or a station wagon is the exact opposite of that, they are niche vehicles. Just look up the top 20 best selling cars in the United States and the names your will see are Toyota Camry, Honda Civic, Nissan Altima, Toyota Corolla, Honda Accord, Ford Fusion, Nissan Sentra, Hyundai Sonata, Chevy Malibu, etc., all of them are four-door sedans. The reason these cars are so popular is because they serve the exact purpose that you claim is needed most, they make serviceable "family cars", with enough room for Mom & Dad and the 1.87 children, but they are also great cars for Mom or Dad to commute to work in, but also small enough that someone without a bunch of kids will also be attracted. The reality is, that the majority of families are going to have at least two vehicles and at least one of those vehicles is going to be something like the Model 3, a four-door sedan that is more versatile than the big family hauler that they already own. Another key factor is that this is an electric car, where size really does matter. If you want an affordable 200-mile range vehicle, it's got to be a smaller vehicle.
