I use 4 sizes although it is through IIS smooth streaming (similar to HLS but microsofts version). Basically I encode for HD at 1080,720,480,360.. Anything less and it's wasted space. I've had no complaints in 8+ years and millions of videos being displayed both on roku and the website. Also Roku 1s which there are tons still in use, have a problem with 1080, they bog down. The processor is just too slow for it. keeping this in mind I experiemented and through in lower quality and lowered bitrates in between the standards, what I found them to dfo is jump back and forth, whereas if you just have 1080/720, they most likely will just sit at 720...
Also I know Roku and the TV manufacturers are pushing for 4k, but the end users simply do not seem to care by and large. The majority are just as happy at 720 as they are at 4k except for football games and modern feature movies..
http://www.TVByDemand.com