Does small have limits?

Furthering on the 37Signals evangelizing of small vs. big, Mena Trott has posted some thoughts suggesting why a bit larger can work well. Both Jason and David responded, to my mind in a more defensive and argumentative fashion than I'd have expected.

I appreciate where these guys are coming from, but if they think that any problem can be tackled with the size of team they've got, and that any goals can be reached, they're full of shit. Everything has tradeoffs. I'd like to think they're just being evangelists for the approach, where they feel they have to push back hard against the prevailing opinion. But at their core, do they see the choices that they've made that allow them to work the way they do? I hope so.

I'd be more comfortable if their basic argument was structured like "1. Small teams can work well with problems that have these characteristics (but less well for those with these others). 2. There are a lot more of these types of problems out there than you might at first think! 3. If you want to tackle one of those types of problems, let's show you how best to make small teams work..."