It's fairly simple. Because corporations want to control a full island, and because this requires a lot of people, they recruit more and more. This leads to progressively larger and larger corporations with bigger and bigger fights.

Frankly, I have little to no interest in 300v300 fights, 150v150, or even 75v75. However, smaller groups of people don't have any way to control a section of an island unless they NAP (non-aggression pact) anyone and everyone. This leads to blob warfare between large island controlling entities, and less frequent small group engagements.

By having lots and lots of smaller islands in addition to a few larger ones, you would allow for smaller corporations to have their own place, outside of corporations they simply are forced to join otherwise if they want to be on a beta island.

Also, smaller islands allow for more small engagements, as well as the element of surprise in ganks and other things. It would keep the solo player or the small group player entertained. In addition, it would allow for larger entities to try to conquer smaller islands, allowing for progressive wars between larger entities accross multiple islands, where progress can be tracked through smaller island conquests.

Things a small island would probably include:
1 terminal, perhaps upgraded facilities like other outposts
2-3 teleport stations
5-6 npc spawns
Ore deposits, but perhaps not every type of ore, depending on the size of said small island.

In fact, simply changing up the sizes of islands in multiple levels would be more interesting and allow for more fun. Have medium sized islands as well. Have islands without any terminal. Basically, island variation would make the game much more competitive and entertaining.