It's based on 28 mm (1") figures yes (up from 25 mm figures). For a tall person that would actually make a meter roughly 15 mm (9/16") in our case. Commonly though figures are based on 20 mm or inch wide squares and therein lies the problem. Typical people don't occupy more than 1 meter squared at a time, even in furious action they'd be hard pressed to occupy a 5 foot square (1.5 meters square), you can fit an entire bathroom into a five foot square, shower, toilet, and sink (my bathroom is 6 ftx 6ft and comfortable, 5ft wouldn't be that much of a squeeze, the door, only slightly narrow, is 2 ft wide ). 5 ft is a lot of space. That is where, as you say, using a larger than normal measurement helps keep large things on the table, so to speak.
The problem I find is that generally when people use this atypically large measurement during creation you end up with unrealistically large everything. Even if someone keeps this understanding at the forefront of their mind they are still likely to edge things larger than they should be, if only to maintain whole squares. I think that if many maps were just taken as are and someone said the grid now represents 1 meter wide squares they would instantly assume realistic proportions. Many times have I seen objects like slop buckets or chairs taking up whole squares, it leads to somewhat ridiculous situations if one stops and thinks about it.
In JonPin's case here, 5 ft squares actually serve the purpose of the building, as it is a grandiose hugely expensive temple made to last as long as it can. A ten foot wide doorway in a temple is an imposing and impressive affair, it is very reasonable to put here. Still I find the larger grid lessens the impact of the actual size of it all, as it makes everything seem smaller than it really is. If the grid were in a more natural measurement of meters or yards it would better demonstrate just how grandiose and large the building and it's features are. So really the problem is between playability and representation (isn't it always).
In any case, as I said earlier, this is my own particular annoyance and I don't expect any change to suddenly overtake the gaming world. I will just continue to live with it I think once it gets far enough along in my new Dwarf Fortress I'll map it (probably poorly) in meters and overlay a 5 ft grid afterwards and see what it's like. And then probably redo it (again probably poorly) into 5tf squares just for ease of use. (in my own mind I imagine dwarf squares as meter wide by meter and a half tall)