It seems like the ISOs have grown much larger much faster the last couple of years. Gnome is at 3.5, XFCE at 3.7, and KDE at 4.0 GB in the latest releases. All these used to fit on a CD around 0.7 GB!
What is going on here beyond just the gradual growth of all software packages?
This. 
Maybe the word should have been normal?
Well, and there’s also a growing need for more hardware support out-of-the-box, from Nvidia drivers over Bluetooth stuff, proprietary network drivers, and so on. And repair tools. All of that takes up space on the .iso too.
@Aragorn I totally agree with OP. The manjaro-kde-minimal (non-LTS) release is 3.6 Gigs in size (more than ubuntu 20.04 which is 2.9 Gigs). But if we consider manjaro as a total “noob-friendly” distro which should cater for all the issues ootb then I am fine.
That helps explain the question.
What else is there if anything?
Wondering why the size increased is like wondering why a toddler became bigger since the last time you’ve seem 'em.
Well, there you have it. We also get lots of feature requests regarding things people feel should be included in the .iso, and unlike with Ubuntu, the Manjaro developers listen to the needs of the community.
That doesn’t mean that everything on the kitchen sink will be included, but like I said, the essential tools for doing system repair will be included, and some packages that weren’t there before but that the users requested.
Trying to figure out why the size rose is like trying to figure out why a toddler has grown since the last time you saw them.