The street lamps in the photograph at the end of that link are clearly not shrinking in size in the distance as they should be. The street lights in the distance are all the same size. How do you explain that? What aspect of "lens flare" causes light to appear at the same size regardless of distance?
those lights look as they do because of pixel saturation, not lens flare. that's why they all have the same sort of shape. light from saturated pixels in the ccd is spilling over to adjacent pixels. and probably mie scattering, too.
also, those lights do get smaller with distance. open up photoshop and measure them. the background lamps are at least half the size of the foregound lamps. since you don't know the real distances, i'm not sure how you can say they're not shrinking as they "should be." how small "should" the background lamps be?
Yes, the Wiki addresses why the lights in the foreground are larger.
The effect only applies to the far field street lamps, not the near field street lamps. A street lamp once centimeter away from your eye ball will, of course, be much larger. The street lamps in the near field may be too close to catch on to the atmosphere or are larger than the projection.
The far field street lamps are all the same size, showing that there is an enlarging effect. The street lights in the distance are not appropriately shrinking.
Per your argument of "pixel saturation" as an explanation for these scenes, if the pixels were bleeding into the pixels near them, the lights should still shrink as they recede into the distance, not stay the same exact size. A smaller light would cause a smaller diameter of pixel bleed around it.