Why don't they make 5.25" hard drives anymore? Will the 3.5" form factor also die?

3.5" drives are cheaper and higher capacity than 2.5" drives, and both are cheaper and higher capacity still than 1.8" drives. I would bet this is because you have more platter area to use (thus you can use less optimal (and less expensive) surfaces to get the same capacity, while controller/chip-set cost is about the same for each.

Does this not scale up or is there just not enough demand. most desktop I have seen have a spare 5.25 inch drive, so I don't think it is demand so much.

The only other explanation I can come up with the larger platers require stronger materials for the same rotational speeds, and this sets off any gains that might be made with a lager platter area. Does this imply the future or rotational media is 1" platters moving at 45,000 rpm?