Originally Posted by
nomadmax
Bunkie
I'm not an engineer but I have stayed in a Holiday Inn

I would say the chief reason larger pulleys are touted as "better" is that they reduce the angle/bend of the chain when it goes around the pulleys, thereby reducing friction.
If you ever held a new or freshly lubed chain in your hands and bent it - the difference between bending one link 30 degrees, and being it only 22 - that's the advantage you get (minus the weight disadvantage from using two more chain bits, and a larger pulley, and a bigger cage of course) from using larger pulleys.