4 by 5 was popular with press photographers in the 30s and 40s because it was small enough to carry a handfull of film holders in your pocket and run to the scene of a crime, or whatever. The 5-inch wide image also fit on a page easily. The huge user base that built up hung on.
Originally Posted by Bertil
8 by 10 gives you an amazing image, 5 by 7 being somewhat in between those two extremes, it was just the odd size and got bypassed especially now as things are tightening up and manufacturers are looking for what sells the best.