I was agreeing with you. Blocks too small have the same effect as blocks too big. 

If they are too big, people can't afford the hardware to run a node. 

If they are too big, people can't afford a utxo, so there is no point running a node. In this case people are forced to use custodians. Custodians centralise to large entities due to economies of scale, particularly at high fees. Since the custodians are the ones paying the fees, they are incentivised to run miners. This gives them control of the network for the same cost as paying the fees. They can run a slight loss on mining to force out miners who can't subsidies costs with fees they charge for being custodians. 

They are then incentivised to spam the network with additional data to price out all but the largest custodians. This is revenue neutral as the mining rigs pick up the revenue from the fees paid. 

This seems to be the Microstrategy play book.