I go to a high school with several thousand people. I don't know everyone in my year as there are 500 people but I have a much greater choice in what subjects I want to do. Our school offers six main languages which could not happen if we had fewer people as well as subjects like maths/science/ English divided into five ability groups. I think it works well but understand it's not perfect.
Personally I have found to like larger schools more because you can blend in the crowd and there is always a new face to meet. Some people prefer smaller schools because the whole school knows each other and you do not have to worry about new faces. It depends on the individual, neither one is necessarily better.
I do not believe that smaller schools are better than larger schools. I believe where the issue really lies is in the teacher to student ratio. While currently this ratio is generally better in smaller schools, I think this is a symptom of a problem and not the problem itself. Larger schools could solve this problem by hiring more teachers and creating smaller classrooms, while still providing the benefits offered by a larger school like greater diversity.