Interestingly enough - I can see both sides of the argument. When I was building the IT infrastructure for SSN, I ran the company's IT and it's dozen employees on a $75 linksys (and a half-dozen Poweredge Dell Server) for the first 5-6 months. Eventually, we grew to around 20 employees, picked up a data center colo-cabinet for our customer apps and needed a bit more robustness, so I purchased a $300 used Cisco 2621xm, a couple T1 WICs for $500, and ran the company for the next year on that 3 mbit pipe - the company got to around 50 employees before we moved. For the first two years of its life I spent a grand total of $875 on routing hardware and 50 employees were able to get their work done (including code pushes to our data center) over that 3 mbit pipe.
When I handed over network engineering, though, our last purchase order for networking equipment (with around 500 employees) - was north of $500K (including very hefty Cisco Discounts) (This isn't including the Data Center infrastructure - by then we had colo space in three data centers - just the corporate infrastructure for three buildings)
It's hard to explain without living through it - but the decisions that make sense when you are small, and you aren't paying your network engineers $150K/year (fully loaded), and you aren't trying to figure out how to handle pager duty, and warehouse and deal with RMAs, and support various types of hardware, and worry about rotating inventory, and dealing with upgrade cycles, and manage security, and patch levels, and remote administrations - not even considering future feature enhancements and performance (75 mbits sounds great today - but what about the future?) - when you get to scale, the CapEx (the capital cost of the hardware) starts to have fewer consequences on a technology investment (particularly over 10 years) than the other elements. Not to mention that there are also political issues (Layer 8) associated with differing levels of services/features for small population centers versus large population centers.
Yes - this does result in seemingly ludicrous situations like a 4 computer library being run on a ISR capable of running 350 mbits/second without breaking a sweat - but in 5-8 years from now, some technology administrator for the state will take over that infrastructure, and I can guarantee you that they won't be thinking "My God, we're over provisioned on our networking equipment" - but instead, "Thank goodness I have a few more years of runway before we have to replace all this gear."
I realize I haven't fully fleshed out the argument as to why it might make sense to put these hefty branch routers into smaller locales, but hopefully it doesn't sound silly.
Hey - at least they didn't roll out 6509s in all these libraries. Now that would be something I could rant against. :-)