I should have stated immediately that it should be oversized such as 18x18 for M43, 24x24 for APS and 36x36 for FF. Doesn't make sense otherwise. The corners of the sensor are wasted whereas you gain now wasted parts of the image circle. A clear win to me. I'm aware that FF is pushing the border of affordable sensor size so 36x36 might not be viable yet except as a medium format alternative with similar pricing but MF is coming down too. Another qualification is that it's not for DSLR as there is no space available for the bigger mirror. Nevertheless there's always been mirrorless where it's a logical solution. In the beginning of digital, sensors were probably much more expensive and made up a larger part of the price of the camera so it made sense to stick to film logic and statistics of format preferences thus saving crucial mm^2s of sensor area but that hasn't been the case for a long time now.
For about 50 years a very (? the most) popular style of camera was an SLR. This used the frame size of 36 x 24mm that became popular 100 years ago and still is.
To make a camera with film or sensor 36mm high would mean increasing the height of every one of those cameras. For (D)SLRs it would also mean that the body would have to be 12mm deeper to accommodate the larger mirror; and that would mean that existing lenses would be needed with a longer flange distance. In other words, not an economic proposition.
Moreover, to utilise the full area of the 36 x 36mm frame the image circle is 51mm
* compared to 43mm so either:
(a) a whole new series of bigger, heavier (and more expensive) lenses would be needed or
(b) much of the area of the sensor would be wasted. In fact, the square to fit inside 43mm is just under 26mm so all you get is a fractional increase over the 24mm currently available.
* Note that many medium format digital cameras require 55mm image circle so the new camera would cost close to the cost of medium format digital, camera.