"C++ is a grotesquerie more suitable for a carnival horror show than something you want to introduce to new programmers."
In my experience TAing an undergrad course that used C++, almost all of the things that left students scratching their heads were things that are present in C. No garbage collector, no built-in way to determine array sizes at runtime, no way to determine if a pointer has already been deallocated, no requirement that non-void functions actually return a value on all control paths, etc. The worst thing C++ does is to amplify these problems (particularly that last one -- yes, I know, use -Wall, but someone who is just starting to use a language would not know that, and having to teach compiler flags is an even worse distraction from the subject matter of the course).
Really the problem is not language size at all. Python is a big language too, but it does not have the above problems. Common Lisp is just as big as C++ (in terms of the number of pages in the standard), yet these are not problems Lispers have. Scheme is a small language, like C, yet the elegance and expressive power of Scheme is on a completely different level from C.
The problem is that the few abstractions C presents are hard to deal with, especially for beginners, and the abstractions that C could present are sorely missed. Even the abstractions C presents are unreliable, with loads of undefined behavior and plenty of ways to break the abstractions.
Really, the fact that real-world C programmers have to pick a subset of the language and enforce various style standards and coding conventions speaks volumes about the suitability of C for beginners. If we were going to require students to use a specific subset of C, why not just write a compiler for that subset and use that to teach? The answer is pretty clear: if we were going to write a compiler for a new language that was suitable for teaching students, we would write something better. Why bother when we already have better languages to choose from? Save C for the OS course, and only as long as it remains relevant there.