If anything, the "matrix menu" where you have X proteins in Y sauces for X*Y stir-fry combos is usually a "restaurant smell" indicating that they don't really care about the end product (satay salmon, anyone?).
What are you defining as "good"? Luxury restaurants?
Because I've been to hole in the wall restaurants in the middle of nowhere, and they'll have 20+ things on the menu and the food is generally delicious. I've been to higher end restaurants that have 8 pages or more. I've never seen anything with a tiny menu, except street stalls that only sell one or two items.
I'm definitely a person who prefers larger menus. Small menus make me worry more about what to order because it's usually 1 or 2 things I want, with 1 or 2 things I don't want in the same order. I also generally don't return because there isn't much else to try unless the few items are all appealing, which is rare. Longer menus at good restaurants keep me coming back to try new things.
And yes, higher-end restaurants do tend to have longer menus, because in China these cater mostly to large groups and entertaining businessmen, and a key part of Chinese banquets is to order way too much food -- so much so that there's now an official CCP campaign to stamp out the practice.
https://www.channelnewsasia.com/news/asia/china-food-waste-o...
Specialized restaurants can certainly be better at specific dishes, but at the same time, the lack of options can be detrimental. For example, my kids won't enjoy a meal all that much in a place that specializes in spicy hot pots. Or maybe one person in the party will think the food is too heavy or spicy, etc.