I agree that smaller pieces blend better when you are dealing with true scraps. If, however, you are working with a planned scrappy collection, I think you can get away with larger pieces.
A lot depends on how I want to quilt it too. If I plan to showcase some fancy FMQ, I'll use bigger blocks of fabric-- fewer seams to hit, more space to let loose and stitch. A quilt with very small pieces tends to get heavy and I generally use a simpler quilting pattern there.