The fact that 20's will fit on the Corolla confirms for me that it is oversized wheel openings that make the standard wheels offered appear so small.
The slab sides of the Corolla create such a bare profile that the designers created the large wheel openings to break up all that plain surface.
Designers usually overcome such challenges with crease lines, moldings or painting the rockers black and other "tricks" to try to reduce the visual mass.
Owners try to visually compensate by lowering their Corollas, going to bigger wheels or adding the body side moldings.
I agree that the 20's visually balance the Corolla's appearance far better than 16's or 17's. I just wish that the handling, ride and mileage compromises with 20's weren't such significant considerations. Personally, I'll be going with 18's on 40-series tires as a sort of middle ground.