It's all relative to map size. 200 players on a large map is a terrible thing for trying to actually find a fight. But the same 200 on a small map can be a lot of fun.
I really hate caps on the large maps, but don't really have a problem with them when the map is a smaller one.
No it has nothing to do with the numbers of people in an arena, it has to do with the style of play of those people.
When the large maps first came out you could find battles all over the map, all along the fronts. Each squad would try and grab a base, and opposing squads would defend them. 7 vs 10 and such were the norm.
Todays squads are "clans" and have nothing to do with being a "squad" Most just join up because they like the name, or want to be one of the "crowd".
Squads use to work as groups using tactics and strategies to execute missions. Squads use to recruit to have a few good fighter jocks, a few good buff pilots and a few good GVers, rounding out the rest as fillers/trainees. They worked on approach vectors, were to drop what size bomb to get the most out of each bomb. They practiced these plans and attacks, as well as figuring out how to counter them should someone else use the plans against them.
Picture it like a football game. Plans were made and executed. Opponents were IDed and weaknesses were exploited. Today one team comes ready to play, the other brings three times the number of players, doesn't make a plan, doesn't care who the other team is or what their weakness are, they just roll over it with pure numbers throwing away "bodies" in the name of the quick "win".
Old days on a big map was 10 decent little fights going on across the fronts, today its just a single battle full of nothing but HOin, pickin, and hording.