I suspect that Airbus will be proven right. Air travel has been increasing exponentially since the 80s. In the near future, you will need big aircraft to carry the huge amount of passengers. They cannot afford to use many smaller aircraft because airports are already quite full and cannot accommodate a large amount of aircraft. So the solution is bigger aircraft that carries more passengers but takes up only one slot at the airport.
For Boeing's plan to work, the smaller cities will need to increase their small municipial airports to a size capable of handling narrow bodies instead of the current turboprops and business jets. I find it impossible that all the smaller cities would be willing to spend the kind of money to do that. Boeing's so called "small planes" isn't that small at all.