I rent a 2BR with small bedrooms and a galley kitchen to a young couple, who don't cook and really only use one of the bedrooms. But the large amount of common space and the on site laundry makes the apartment worth a lot to them. As a landlord, I'd be more worried about making the living room smaller (it sounds like there's no dining room in the apartment you're talking about) than about the size of the kitchen.

The apartment I rent out has laundry machines in the basement (shared with another apartment) and also hookups in a closet in the apartment proper. No tenant has ever bothered hooking up machines. Seems to me like if you do add hookups, they needn't be in that big kitchen.