I highly doubt there will be a larger screen. They won't force developers to code for another screen resolution and they won't want to lose the retina.
I agree with you. I think what people are thinking as a 'larger' screen is really Apple shrinking the phone around the current screen. Apple is crazy about thin and small and I'm sure they want the iPhone to be more like the iTouch if possible.
But, this creates a smaller DPI and kind of ruins the retina display.