I think the OP (Arthur?) and clam (Malc?) are both correct, but in different aspects.
As others have said, all buildings/assets in Trainz are the same "size/scale" relation to the locos & rolling stock, whether you call it 1:1 (real), 1:87 (HO), etc.
That being said, many of the buildings and assets out there are far too oversized for use on a model railroad, as is the new craze. Regardless of the scale you use, many of the buildings use much larger dimensions than what you'd see of that same structure in real life - that is due to the creators of those pieces of content not building their structures to the proper scaling for Trainz. Just as an example, the "grain elevator" that looks much like the Walthers model is HUGE! Compared to the smaller but similar Pillsbury elevator (names might not be correct, but I'm not in Trainz to look at that specifically at the moment), they are meant to be almost the same building, but one is twice as large.
On that note, with the new model railroad style of layout/route people are liking to build, we do need "smaller" buildings to use. Older time frames do have smaller buildings, as that was the norm then, but newer industries that still receive rail service are often quite huge. Sure, we can hide a majority of a structure behind the wall/back drop, but once you start placing structures between the tracks and layouts front edge, size matters (so to speak). There are buildings out there, it just takes time to find them. Hopefully though, many of the content creators will also be "inspired" by the model railroadz trend and build some smaller assets and "flats" for use in this exciting "new" part of Trainz.
Chase