With film medium-format, 6x6 and 6x12, I shot street/documentary photography almost exclusively. I have also done this with MFD. However, camera type is also very much related to the way I like to work and I prefer rangefinder/viewfinder cameras. Most of my work now is shot on a Fuji X Pro2. But the Pentax 645D is also a great camera to work with:
With film, the only real way to increase image quality was to go to larger formats. Since film speed was important (I always shot 400 ISO films), I found medium-format cameras the best compromise between size and quality--I also liked the variation in aspect ratios. This is not as true with digital cameras as sensor resolution and performance is not as fixed--with film, the relationship among film speed, resolving power, and granularity is very difficult to change.
But I have never been one in thinking a particular camera is for a particular task. (Obviously, 6x12 panoramic cameras can be used for handheld documentary work just as well as a 35mm camera (4x5 and larger cameras were used for journalism long before medium and miniature formats.) Cameras choice is simply another factor in solving visual problems. The photographer is just going to have to figure out how to adjust to a particular imaging system to achieve the result they want.
My epiphany was putting together a photobook on the Tsukiji fish market that was shot on medium-format film. The images did not reach the technical quality as finished images that my APS-C camera could achieve (both great, BTW). And I have made 40" prints from my Fuji. Certainly, my Fuji does not come close to the Pentax 645D in term of quality, but neither is it a slouch. Personally, I try to optimize my image quality across several factors, rather than maximize it to one or two. While 40" or larger prints are nice, that is not a size I have found to be practical or rewarding for me or my work.
Still, I agree that MFD is a great tool for street/documentary work.