The problem with large groups is that they limit the importance of any given player (there's 30 dps, who cares if one of them does well or badly?), or it rests a disproportionate amount of the responsibility on a few people (classically, this was often the main tank) and really it enforces a less tightly tuned encounter. It also tends to mean that the proportion of roles is even further from the 5-man group composition which is an issue for aspiring tanks and healers. Many people do feel that large groups feel more "epic" though.
The problems with small groups are that they can be over-tuned (like T11 10-man heroic) such that class/spec discrepancies and buff/debuff coverage make group composition very important and that with the current loot model, it's less likely that a given target piece of loot will be dropped. Many people do feel that small groups are easier to organise and are a more feasible "friends" group size (though this often comflicts with the tuning issue).
Originally I thought that the 10 and 25-man split was a really good idea, and compared to the Vanilla and BC models I think it is a huge improvement, but after living with it for a couple of years I think it causes quite a lot of hassle and I'm not sure it's the best approach: one raid size would simply be easier to deal with.
In Wrath I quite enjoyed running 10-mans on my alts or off-days, but it was always strange to me that 10-man heroics were harder than 25-man normals, but dropped much less, usually worse gear, except with the odd piece where itemisation meant that the 10-man heroic piece was better than any of the 25-man normal pieces, that was a pain.
I don't think that it's possible to truly balance 10 and 25-man raiding so that they're the same difficulty (though Blizzard have got it closer than I thought they would), and that they reward participation the same. Any discrepancy is a cause of conflict and irritation and I just think it would be easier all round to go to raids of a single size: everyone would know where they stood, everyone would know what was required, nobody would feel slighted or advantaged or be looked down upon as currently happens with the choice of raid sizes.
I'm not sure what the best raid size would be, I voted for and am inclined to say 25-man, but maybe that's just what I've become accustomed to!