You're right in the limitation of space aboard the 77W - but I think EY do a decent job of having a lavatory bigger than the standard size and actually pretty comfortable. The same can be said of their 346 aircraft as well.
If you look at Emirates or Cathay Pacific however - there are no excuses for a Y sized lavatory.
The lavatories in Y on the 777 were surprisingly roomy. The decor was nice including a wooden bogseat! All they need, in addition to all the bells and whistles, is a light dimmer so you don't feel like you're sitting in the glare of a searchlight!
Just as well they don't have ICE in there otherwise nobody would ever come out!