160mm rotors are the smallest common size and they work fine in the right situations. If you're a lighter rider tackling cross-country trails or mostly flat terrain, 160mm provides adequate stopping power while keeping weight down—which is why XC racers often prefer them.
However, 160mm rotors can struggle on steep or sustained descents because they have less surface area to dissipate heat. Heavier riders or anyone riding aggressive trail terrain will likely experience brake fade and reduced stopping power. That's why many trail bikes use 160mm only on the rear, paired with a larger 180mm up front where most braking force happens.
If you ride anything beyond moderate terrain or weigh over 160 pounds, consider upsizing. Also, check your fork and frame compatibility before switching—some won't accept larger rotors without an adapter.