As other's have stated, it has more to do with CFM capability than tank size compared to the requirements of the tool.
Before I got my 60 gallon Husky (made by CH), I had a 20 gallon Craftsman, which was RATED for 5+cfm @ 90psi. It did OK for impacts. I then happened to get a 4 gallon CH "contractor grade" at the dump that only needed a new reed valve, but was rated for 6cfm @ 90psi, and it did SIGNIFICANTLY better with tools such as impact wrenches.
Tools like impact wrenches are USUALLY operated in bursts, especially in home use, so smaller compressors like above do OK, but not so much with stuff that needs continuous high flow, such as sanders, high cfm air hammers, etc.
For me, soon after I got the 60 gallon, I've rarely touched it (about 7 years now) because Milwaukee started coming out with their uber M18 stuff, and I haven't looked back. At the time, I picked it up because HD had the display on clearance (because of "new models"). They were selling it for $275, and just on a lark, I asked the floor manager if they would take $200 (or something like that), and he agreed on the spot. I didn't think he'd say yes, but once he did, I felt compelled since I was the one that offered.