First, early missiles had pretty lousy accuracy, so you needed a bigger warhead to ensure destruction of a particular target. The other was to attack superhardened targets, like Soviet bunkers (the equivalent of Cheyenne Mountain). The Soviets had super-sized warheads for those reasons, too. Some of them were specifically aimed about 14 miles south of where I'm presently sitting.

The revolution in accuracy has changed everything. With the incredible accuracy of so many modern weapons, you can be assured of killing all but the hardest targets with much smaller warheads, most of them using conventional explosives. When you can fly a cruise missile into a particular window of a building or drop a bomb down an air shaft, nukes are seldom necessary.