Is "limits scale" a bug or a feature?

I expect that a lot of the success of the capitalist model stems from the fact that most actors in this model are not too big to fail. (See "internet": To make a resistent system, minimize the impact of any single node going down.)

The idea of a "market" is based on something like a bazaar, where no individual actor matters. When any single actor is large enough to matter on their own, you are leaving the the market model behind. There are terms like "monopoly" and "oligopoly" for that.

When the issue is "we can't let these actors fail, they are so big that it would destroy the market", it sounds like the solution should be a simple size limitation.

Where's the problem with that?