Perhaps so, but the sample from which you infer people's preferences may be biased. Obviously, in a group setting loud sounds from small models would be inappropriate. Other settings and preferences exist.
You're absolutely correct - it was strictly a person observation from personally attending operating sessions on layouts, and operating models equipped with sound decoders. Also participating in operation of an NTRAK layout with sound equipped motive power during model RR shows. Strictly non-scientific personal observations. I also noticed sentiment similar to mine when reading various online forum discussions about DCC sound.
I'm curious - have you ever participated in 3- or 4-hour operating session at a home layout with sound-equipped locos? What was the sound volume in the operating models? What is your "bias"?
To be honest, the most severe example of too-loud model sound I've experienced was back in the '90s during one of the model RR shows. A fellow NTRAK member owned a module with a locomotive service facility. It had a local throttle so he could shunt locos around the facility without affecting the regular NTRAK traffic. He had a Diesel loco sound emulator he just purchased, hooked up to a HiFi amplifier and a full size speaker system (with a 15" woofer) that he normally used at home. He had the sound emulator hooked up to his local throttle and kept revving it up and down as he shunted his models around the layout. He had the volume set so loud that you could actually feel the deep bass Diesels sound! After couple of hours of this "torture" all the club members (and even some spectators) complained, and asked to him to lower the volume. It literally felt like a torture.
Hey, if you enjoy gut-shaking bass sound seemingly emanating from your tiny model - enjoy. Not for me - thanks.