At the time there was the argument that larger blocks were bad because they would increase the size of the chain and prevent casual users from storing the whole chain and verifying it themselves.
I think the chain was already too big for casual users at that point!
I always thought the argument that full nodes should be inexpensive to operate made a lot of sense. But keeping blocks small would obviously lead (and clearly did) to transaction costs high enough to price out most people that actually want to use it.
Wait for the lightning network is an insulting reason to kill the p2p cash use case, which in my opinion is the only thing that makes the "store of value" use case work.
I think the chain was already too big for casual users at that point!