Sorry I didn't respond immediately; somehow I seem to have overseen this thread. Anyway, to answer patrick's & others's comments:
-Once again, I did not say that every zoo should keep elephants-though I mentioned the option of solitarily kept surplus elephant bulls, on which nobody responded so far (keeping other species like blackbucks or porcupines together with the elephant would also contribute to using the capacity of the available space). What I said-and that involves both larger as well as small zoos within cities with limited space-is that a zoo with not at least one representative of the "charismatic exotic megafauna" will in general have a hard time to get its visitors unless it can put its presentation across in a very creative & captivating way and if it doesn't have much competition, i.e. other zoos keeping larger vertebrates, around. NZ Jeremy brought up some of the animals zoo visitors all over the world consider "the" zoo animals they want to see. The categories are usually:
-size (the bigger, the better)
-colour
-"interesting" behaviour (active, moving and even responsive to visitors)
-cuddly or "dangerous" ("Fierce Creatures", anyone

)
-"human-like"/"smart"/social (apes, bears, parrots, meerkats, dolphins...)
-easily memorable name ("Panda", "Tiger", "Zebra"...)
-popular due to media (warthogs, clownfish, Naked Mole rats)
-rare (with a great chance that You won’t see them again the next time or somewhere else…)
Keeping this in mind, one will find both large and small animals (mostly mammals, a few birds and even fewer for vertebrates or even invertebrates-actually all in all species one can find represented in zoos worldwide). Therefore, one can have an interesting zoo for the public with mainly small critters unless some of them fit into the category mentioned above-but nevertheless, at least one representative of the "Big & Tall" section is expected, may it be a big cat, large ungulates or great apes. And it's not just the expectation of the visitors; think about the educational factor: what conveys better the diversity of the animal kingdom than representing tiny animals with the "background" of a true giant to compare and marvel at? Humans are always fascinated by sizes or superlatives per se; just look around and You'll find that weird aspect of the human mind represented in architecture, arts, electronics, food, sports, plastic surgery...etc. Cutting down on the number of large, inadequately kept animals in a small city zoo on its way to a "modern zoo" is a good thing I fully support; but beware of cutting away ALL large animals. Look at the example of the Central Park Zoo; at least the Polar Bears were kept in consideration to this aspect. Or the nice Rheine Zoo… If small city zoos follow the maxime of the current Director of Tierpark Dählihölz: "More spaces for less animals", I'm the first guy giving standing ovations, as I want to see and keep healthy and happy, adequately well-kept animals in a modern zoo. But be careful and integrate also at least one larger species popular in the public's eye into that concept; otherwise You might end up with a single enormous “meerkat exhibit” as "the zoo" and see the people pretty soon leaving for the neighbouring zoo that has "real animals".
-The "Open Range" Zoo is an interesting idea-but it's worth to dispute whether this concept works equally all over the world. The idea of "Safari Parks" was quite popular in Europe in the 1960/70s, but soon dwindled down: Germany f.e. just has two of them left. And is the open range zoo really always and everwhere the solution-or even possible? Depends on the species and the zoo (setting).
One barrier many zoos face on the way to this dual zoo system is the in the other thread already mentioned, most important one: lack of money. I don't know whether Australian or New Zealand zoos have some real-life, gold-defecating cash cows in their animal collections (if so, please breed & share them!)-but the zoos I know of usually, especially the smaller ones, just have barely enough money to keep one institution running. Having two zoos to care for would be too much for many of them (think of the Berlin example). Secondly, in overcrowded areas like many parts of Europe, apt properties for large open-range zoos are hard to find-and expensive, too-which leads us consequently back to Point One...Don't get me wrong, though: many zoos have institutions for breeding purposes, food storage outside of their zoo location; but a second facility opened and built & run to please the public? Thirdly, in consideration of the dwindling amount of available resources: will many people have the money to spend on transportation for the additional one or two hours to the open-range zoo? Especially as it’s far away from the city? That might sound ridiculous-yet after getting my first shock today when receiving my gas bill at the petrol station and then getting my second shock when hearing the cost estimate for a train ticket, I dare to imagine how things are going to change zoo-wise if this is getting worse. Maybe it would be good to sometimes look beyond one's nose and think on a more international level. Don't judge from the one or two zoos in Your close neighbourhood that don't have lions that thus all zoos could do well without lions and have more of the very work-intensive butterfly houses instead; better compare different zoos, in different settings, in different parts of the world before coming to a prematurely conclusion, generalising all zoos.
I also doubt that an array of many small critters will make the visitors stay longer at the individual exhibit and pay more attention. What is needed is a generally better presentation-but that should involve both the big and the small animals.
Though I admire a lot of what David Hancocks has to say about zoos, I do not agree with him on the aspect of an ideal future zoo having no or only very few of the popular species, but instead a lot of interactive “electronic gadgets”. Computers and video games can play a role in the educational zoo program, but can and will never replace the (direct) animal (sensoric) contact. This is also illustrated by the fact that Hancocks’ praised “Electronic Zoo” in the UK has as I’ve heard so far not become reality after all those years…
I agree with Patrick on two aspects:
1.) The current status of zoos could and should be improved for a zoo apt for the 21st century
2.) Not every zoo can and should keep all the popular animals from A-Z if they can’t be housed properly. BTW, this is also true for ALL animals, not just the “holy cows” like Elephants, Great Apes or dolphins.
But I disagree on the assumption that people will simply switch their attention from one animal to another if You simply take the popular animals away and improve the presentation of the “nerd” animal; some animals just don’t have “the look” (=do not qualify for any of the categories mentioned above), while others are popular all over the world.
Another thing I disagree on: “I believe that most city zoo exhibits are roughly half the size they should be”. Once again: Depends on the species and the zoo (setting).
Additionally, one should not forget the average visitor’s point of view. Though there have been reproaches of projecting hang-up opinions about what visitors aspect of a zoo, one should not forget that we’re here at a forum for zoo fans-which means that most people here have way more knowledge and interest in animals and zoos than the mass of people visiting zoos. Therefore it’s quite difficult for us to judge what Average Joe wants to see-for we here appretiate animals like Mountain Anoas, Palawan Hornbills or Cuban Iguanas to which most visitors absolutely can not relate to. I personally can judge from what I got as impressions and opinions presented by various people when I did zoo guiding tours at my local zoo during my studying time, while working in zoos, reading zoo literature (the AZA magazine had some interesting articles about that subject), talking to zoo staff/colleagues, when I visit the local zoo with friends or family and when I simply listen to the comments of zoo visitors as well as reading the comments in zoo fan forums about zoo visitor remarks.
Summa summarum the following can be said about Average Joe at the zoo: On the one hand, the average modern western visitor likes if the animal is not presented to him/her in a bare concrete cage, but in a naturalistic setting (or what he/she thinks is a naturalistic setting…) and if the animal seems to be healthy and enjoy itself. On the other hand, the same visitor is soon frustrated if the animal can not easily spotted and/or is not active on command (see comments on f.e. the new Zurich Lion exhibit or Frankfurt’s Clouded Leopard exhibit as well as on various newer exhibits), certain expectations are not met (crocodiles have to be big & mean…etc) and is mostly not willing to spend a lot of time on reading the info sign and to be patient. The animal is supposed to be “there” now and “entertain”-as one as a customer has paid for that entertainment! Knowledge about animal behaviour is usually scarce, so that sometimes normal behaviour is considered abnormal (“The animal sleeps too much”) and vice versa. All in all the average zoo visitor hasn’t changed much from the one of the 19th century-and won’t probably in a future zoo. Nevertheless, the changes postulated by both patrick and Hancocks to bring zoos to a higher level are needed to be undertaken-among them the reduction of the numbers of animals kept in zoos to improve the living conditions for the ones kept. But in my opinion, this, with a grass-roots level change of the visitor’s expectations (which will be the hardest task), will only be made possible by a slow, not a radical process.
And about the big animals in a city zoo: let me compare this to a beautiful diamond necklace; not only surrounding material (i.e. the way of husbandry and presentation) is important, but also the ratio of the different gemstones: with too many big ones, it looks pretentious and not too elegant; with too many small and insignificant gems, it might be easily overseen and neglected. To find an individual golden mean should be the way to go.