Reducing the size reduces power demand and heat production. Thermal limits are a big part of what caps current processors in real world/consumer circumstances.
On the other hand “more stuff” isn’t necessarily faster for a given task. You could, for example, add more cores, but while that would let you run more threads that wouldn’t increase the speed of any one thread nor would it magically improve the multithreading optimization of the software being run. At some point you just need raw GHZ, and smaller processors are easier to keep running at their peak.
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