That's an interesting perspective, thanks for sharing.
I think I'd agree that a smaller dot lends itself to greater precision. I myself am not a precision shooter. I haven't been able to realize such advantage of smaller dots over bigger ones. My USPSA driven standard is upper A at 25 yards, I want to hit it with a decent but not necessarily absolute percentage when I shoot in practice. In matches I just don't want to miss the former B zone at that distance. I have just finished my dry fire routine and confirmed seeing my appropriately intensity-adjusted 5 MOA dot well within a 2.5 inch circle at about 18 yards. That's good enough for me. That's for games but I would hope that this should be OK for defensive purposes too.
Other aspects of dot shooting dictate my preference for larger dots. When I shoot at the speed of seeing a streak rather than seeing a dot, I prefer larger and brighter streak. When I shoot a very close target, unless I choose not to confirm by seeing a dot at all, even the largest dot is very small. When I have to deal with dot washout, I want bigger and brighter dot option. So, while I agree that smaller dot should be better for precision, the overall decision is outweighed by other considerations.