Most Americans drink tea exclusively from either mugs, disposable to-go cups, or smaller western-style tea-cups that are still on the larger size. Except for tea enthusiasts, most Americans only encounter the smaller tea cups in Chinese restaurants or other restaurants from Southeast Asian cultures that use similar cups.
This picture shows the teapot and one of the teacups from which I most commonly serve tea to my guests.
I find that using these small teacups has one compelling advantage, especially when it comes to serving tea to others. The small size of the cup enables your guests to drink exactly as much or as little tea as they want, while avoiding awkwardness such as filling up a cup halfway.
This is good for several reasons:
If someone isn't crazy about the tea, a little cup isn't that big a deal to drink, and they can pass on drinking more. If they are particularly enthusiastic, they can have many cups. This can also allow people to choose exactly how much caffeine they want, which is important because different people have different sensitivities to caffeine. I've found that people I have over for tea who are unfamiliar with these smaller cups often remark on how much they enjoy drinking from them.
So, for myself at least, I've found that little cups tend to work well for drinking tea in groups, whereas a big mug tends to work well when I'm by myself.