Are smaller pixels somehow worse? Not necessarily. Just because the diffraction limit has been reached with large pixels does not mean the final photo will be any worse than if there were instead smaller pixels and the limit was surpassed; both scenarios still have the same total resolution (although one will produce a larger file). Even though the resolution is the same, the camera with the smaller pixels will render the photo with fewer artifacts (such as color moiré and aliasing). Smaller pixels also provide the flexibility of having better resolution with larger apertures, in situations where the depth of field can be more shallow. When other factors such as noise and depth of field are considered, the answer as to which is better becomes more complicated.