On curvy streets in a residential neighborhood the stop signs might be 24". That's fine, drivers are going slow and they have plenty of time to notice a 24" octagonal stop sign.
On city streets they might be 30" or 36". Drivers are traveling faster and need the extra size so they see it in time to take action.
On freeway feeder roads, with cars traveling 55 or 60 MPH, the stop signs are 48" by rule.
A 12 inch high STOP stencil might seem big enough - but how close does the driver need to be to see and read 12" letters on the pavement? Probably too close to read, comprehend, and react.
Words painted on pavement need to be bigger than many people realiz. 12" wording is a great size for the VISITOR stencil at the entrance to a parking space. Drivers are going maybe 10 MPH and looking for an empty space. Their attention is focused. They can read a 12" stencil.
But a 12" STOP at an intersection in a parking lot is way too small. Heck, 24" letters are too small in my opinion, but acceptable for some situations. The minimum letter size I use for STOP stencils in a lot is 36", and larger is better.
Just for a mental image, think of the DRIVE THRU wording at a McDonald's - those letters are 34" high, and they aren't really very big, just big enough for a driver who has paused in the parking lot and looking for the drive through lane. Think of the STOP legends in a Wal Mart parking lot. They are 96" high. That might be overkill, but Wal Mart wants them big to reduce their liability in case someone sues them over a fender bender.
I think, if a line painting contractor has only one STOP stencil in his kit, it should be 36" or 42". Your customers and their customers will be better off, and that makes you look good.
Remember - pavement marking is communication. It should be easy to read and understand.