Most of the indoor things that I like to do need a space the size of a bed, armchair, or desk, so I could happily live in a couple of hundred square feet. I do like the idea of a separate space (even just a sleeping loft) for one member of a couple to retreat to every now and then, and a communal kitchen for bigger events seems like a great idea.
(Just calculated -- the smallest space I ever lived in with other people was about 275 sq ft plus 12 sq ft balcony, two adults and a toddler, in Montreal. Probably my favourite living space ever.)