It's not too big for a travel trailer. The only question is, do you WANT a 7'x12' trailer? It's purely a matter of personal preference. Most of the plans you will find here and elsewhere can be scaled up with some minor modification. Basically most of these trailers are just wooden boxes on metal frames.
I would sit down and think about what you need in a trailer, and how you plan to use it. Then draw up a sketch or two to help visualize it. That should give you an idea of the size you need. Most of the teardrops you'll see here are somewhere between 4'x8' and 5'x10'. "Standees" (a trailer you can stand up in) tend to be a little larger.
Don't let a cheap trailer dictate the size if it's not really what you want. You'll just end up building it again later.
Good luck, and welcome!
