I suspect that large maps made a lot more sense when LW was a single arena. Now that it is two arenas during prime time, I don't know that the 512x512 mile maps are serving the game very well anymore.
Like I said, I was never around to see the single arena, but what you say makes perfect sense.
And as Lusche says, the numbers have seemed to be down a lot in the last year or two. I remember when they put the big maps back in rotation. The first few months it was just the same as the small maps (several people online, fights everywhere, missions, etc...). Now, it seems like everyone is just spread out over the map (maybe a new timid playerbase that likes to attack their own base away from everyone else? Really couldn't do that with the small maps since there were less choices?)