We use lots of different wheel sizes on different models of bikes. If you are looking at a UTB, or 6-pack for instance, the wheel size is determined by the model not the bike size.
The recommendation on the size chart is for folks looking for bicycle models that traditionally use 700c wheels. A recommendation of "small" signifies that the reach of this bicycle size works better with a 650c or 26" wheel size. For a touring model, we would use the 26" wheel, and for a racing or sportier model, we would use the 650c size.
We recommend proportional size wheels for bicycles most of the time. For instance, a smaller size bicycle will perform much better with smaller sized wheels. For some reason, this is controversial in some circles, so I've written extensively on the subject through the years. If you're a petite rider, and you want to read on the subject, here's some articles:
