Two different kinds of "small"
In 3.8 the word "compact" means 27 billion parameters: a dense model where every weight works on every step. It accepts images and video, holds a million tokens of context and — most importantly for private work — is open. It is the one worth putting on your own server when documents cannot leave the building.
Below 27B a different territory begins: models of 0.6–8 billion from earlier generations. They do not compete with the flagship on cleverness, but they run on a CPU, fit in a laptop's memory and cost nothing. For field extraction, classification and routing that is enough — and that is the class we measure.
The choice is not between "smarter" and "dumber" but between "fits my perimeter" and "does not".