Wouldn't recommend it... the fuel efficiency will be lost, the towing capacity is greatly reduced, and the wear and tear on a smaller vehicle would be against you. Its the load vs horsepower you need to consider to balance. More exactly - its the torque which gets the trailer rollin'.
Went in the opposite direction... my 2007 Chevy Duramax gets better fuel economy with a larger 20 ft. trailer than either a Yukon Denali XL or Avalanche with a smaller 16 ft. trailer.
If you are considering towing on a regular basis or long distances... don't compromise its needs.
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