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I occasionally carry a Colt '03, and while larger calibers are more comforting, sometimes I still go for comfortable.
The .32 ACP is the original compact auto round, chambered in the FN/Browning model of 1900. That gun was so successful, that early in the last century, Europeans called any small auto pistol a "Browning".
As long as guns are proportional to their power, I think all cartridges can fill a niche. When guns get big or bulky enough that you could step up to a more powerful cartridge without sacrificing portability or handling, most will go with the more powerful round.
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