I also am 5' and I have the large chloe paddington. It looks great and stylish. Personally I think that tall women and small bags looks odd! But you are fine if you are smaller, as you can get any size of bag ... What an advantage!!!
I think the concept of "too big" is the same as being "too old" for something - it's all in what your style is (and how confident you are in that style), not what others think. You're the one carrying it, so get whatever size is practical for you.
I'm about 5'2'' and I love big bags. This bag's length and height would be fine with me. It's the width that would make me not get it. I've found that anything over 6'' is uncomfortable over the shoulder, especially in a structured bag.
Stacy and ******* on What Not to Wear always says that the size of the bag should be proportional to the size of the woman. But they did make an exception once for a very petite woman who was a social worker, so she carried a lot of files with her. They allowed her a big bag. I say carry what's comfortable for you.