I'm sorry, but you cannot design for a 1x1 pixel layout, which would be the "most extreme and degenerate circumstance".
Funny you should say that, I was just thinking of that as an example of what would be technically possible (if unrealistic). As long as nothing hides behind anything else and you assume the user is able to use the scrollbars to their full extent, technically the site would be operable. Making it look nice at smaller resolutions is a different matter, of course, but even so, I think anti-scrollbarism can throw the baby out with the bathwater sometimes.
There's a line that has to be drawn, and just because you use an Arduino with the screen size of a postage stamp as a laptop doesn't mean we should have to account for it.
It has a horizontal resolution of 1366px, actually. Know how many modern websites use the full extent of the screen space available? Almost none (Reddit being a notable exception). This is, again, a case of everyone having leapt onto the newest thing (vertically-oriented mobile phones) and in their eagerness to "account for it" (when "it" had been entirely unreasonable five years prior), forgetting all about the users who were already there.
(Also, I bought this laptop in 2011 - not exactly prehistoric.)
Which is WHY, these days, there are such thing as "mobile layouts"
Ha! There isn't any such thing as a non-"mobile layout" these days, you mean. Remember when a wall of 20pt centred text was the hallmark of a crank? These days, a look at the work of "Dr" Gene Ray makes the man look like a visionary genius. On a low vertical resolution, that site is barely any worse than the likes of Medium.com in terms of likelihood of scrolling-induced carpal tunnel.
(and why it annoys me when phone and tablet manufacturers seem to deliberately work around giving web designers any proper way to detect when the user is on a mobile device)
Yes, funny, that. It turns out consumers don't particularly like being force-fed a version of their favourite website which either has half of its features missing or has been rearranged so they can't find anything, especially now that, resolution-wise, modern mobile hardware design has more or less met (or surpassed) modern trends in web design in the middle.