Kelly, first of all, please let me offer condolences on your loss. I know it hurts. Many of us here at YT have small and very small Yorkies. Peppy is 6" tall and 7" long and weighs 3 1/4 lb. He is almost 20 months old. I do not consider him "small". He is a normal, regular, halthy, social dog.
Sometimes, small ones just happen -- they are perfectly normal, healthy dogs born from regular sized parents who just happen to throw small off spring.
Some wise breeders spend years and years and spend tons of money buying dogs and trying different genetic combinations until they are able to breed healthy happy small Yorkies. I would venture to say that breeders in this category get HUGE big bucks for their little darlins and rightly so, they have spent the time and effort and deserve to be financially rewarded for their efforts. This category of breeder would probably be so very picky about who gets their babies that it would be easier to adopt a human child than to get "approved" to become a Yorkie Parent.
Other times breeders use questionable breeding practices to reduce the size of the dog and in doing so are directly responsible for producing unhealthy genetically unsound dogs. This last category is the one you must look out for.
Please remember -- all yorkies are small -- any dog that meets the AKC standard of under 7 lbs. is SMALL. Please when looking for a Yorkie, don't sacrafice health for size -- put HEALTHY first on your list followed by HAPPY -- size, if on the list, comes somewhere lower on the list.