Yeah I've heard this before. It does seem like when a country becomes too big, it loses ability to look after its people. I get the feeling its because once country goes beyond certain size, corruption, power, overtakes. Like there is too much conflict of interest. Small community managing itself is manageable. 
Some of the best countries in the world im looking at for 2nd residency/ tax / lifestyle are extremely small. Big countries don't offer as much to the individual. 🤔  

 I live in a small country, even i do agree with what you say, tho whole concept of nation state has become obsolete, and precess of fragmentation has already begun in the society, the distrust in the system is increasing no matter where