From the "The Bicycle wheel" (pages 63-65)

"The main functional difference among hubs with different flange diameters is their torque stiffness. For a given spoke pattern, torque stiffness increases as the square of the flange diameter."

"Therefore, large-flange hubs can reduce torque loads in the spokes with small increaes in diameter. It is important to remember that in most hubs torque loads are already adequately supported by small diameter flanges."

[The following part is particularly interesting]

"It is evident from this comparison that small diameter flanges provide adeqaute torsional strength and stiffness. There is no need to use large diameter hubs for greater torsional stiffness, but their reduction of torque induced spoke loads might improve fatigue life slightly. However, with larger flanges the spoke angle at the rim becomes less perpendicular causing spokes to bend at the nipple. This bend increases failures at the threads and probably cancels out any gain from reduced spoke loads. To aviod this problem, large diameter flanges are often spoked less than fully tangentially"

So he isn't saying large diameter flanges don't work. He's just saying they are overkill (actually in another passage I didn't quote he mentions their extra torsional strength would be beneficial for tandems)

The last part about the large diameter flange increasing the spoke bend at the nipple was something I didn't realize.