That particular question is about as old as 'Why did the chicken cross the road?' but even that has been updated from the original. Original? Yes. I believe it was Adam who asked Eve 'Why did the chicken cross the path?' since roads didn't exist in Eden.
For a writer, the length of the work is critical. The adage of 'the story's length will be what is necessary to tell the tale' doesn't always apply. Why? Simple.
First, one does not approach the publisher hoping to get your story approved for submission even though it doesn't fit the criteria. Sometimes, SOMETIMES, the publisher might look the other way if your story is 6550 words and the cut-off is 6500 but those are rare incidents. Why would the publisher do this? More than likely because the story is really good and they would like to publish it. To embellish, I was an editor for a horror anthology and had two stories submitted which, even together, did not reach the minimum word count. They were good stories and I suggested to the author to submit a third story which linked the first and second stories. I could see the potential and they would have made a great story together - a trilogy of flash stories to encompass one short story. The author informed me the stories were not designed to be considered ends of a whole story and would prefer not to add a bridging tale. My only choice in the matter was one of two possibilities: 1) accept the two stories and break my requirement or 2) not publish the stories. The author received the two stories back with a thank you, but no thank you. I really would have loved those stories in the anthology but it wasn't fair to the other authors who submitted works for 4500 - 6000 words since everyone would receive an equal cut of the royalties. To accept two works that barely reached 3000 words was not fair.
So what size fits the situation?
The Science Fiction Writers of America uses these definitions for its Nebula awards, and most people consider them to be basic standards.
Even short fiction is subject to size definitions. Per the Short Mystery Fiction Society and their guidelines for the Derringer Award:
There you have it, cut and dried. A perfect answer that clarifies everything needed to know about what size your current work-in-progress should be. Okay, maybe it isn't the perfect catch-all.
Here's a better idea. The above are guidelines established by two different writing societies for their groups. When you are submitting for a contest or just attempting to get your work published somewhere / anywhere...read the guidelines. Those magic instructions and desires by individual publishers will let you know what they want and expect.
Yes, size does matter ... to a publisher because they know what they need for their next publication - whether it be a novel, a story or even just a filler. There is a reason for them to state that they are looking at this or that size. As an author, it is your desire to feed their need, not feed your ego.