There are numerous reasons to brew larger batches. I have several reasons and I'll try to list them.
1) My family and friends drink all my beer.
I made home brew as a holiday gift for family only. I gave away 15 of 30 gallons of beer brewed in November. I almost consistently give away half my beer. Even when I'm not giving it to family, I'm giving it away to neighbors, or trading it away to fellow brewers. Brewing a larger batch fills my 'orders' and allows me to have some as well.
2) I experiment a lot.
It's common for me to brew a single wort and pitch two different yeasts- or maybe dry hop version A and not dry hop version B. Larger batches allow me to experiment and not commit/ruin an entire batch. I can have my wheat beer and I can the same wort with a Belgian Saison yeast in a smaller batch and learn if the Saison yeast makes the beer better or worse. Or I can put some on oak, or age it, or whatever. It's not all or nothing. It's a little bit of this, a little bit of that- I can fool around and not risk everything. I've made as many as 5 different versions of a beer from a single wort.
3)I brew less often, which SAVES TIME.
Now an avid brewer would say why would you want to brew less? Well I have other hobbies, like building brewing gear.
My good friend brews 5 gallon batches and he gives away half his beer just like me. He brews every other weekend. He loves brewing, but says he wishes he had time to tweak his system- but he doesn't have the time because he's always brewing. LOL.
I haven't brewed since November- and my RIMS in box is almost done because I do have the time! I've been drinking home brew for months without brewing and instead I've been tinkering with brewing gear. I'm actually looking forward to getting the rig out because I want to fire this RIMS up and see what happens.
4)It saves me MONEY.
Homebrewers are notoriously cheap. All grain is less expensive than extract because grain costs less. Grain in bulk costs less than small quantities of grain. That is, 55 lbs bags cost less than say 5 lbs or 1 lbs bags of grain. I have three brewing friends and it's common for us to either buy 55 lbs bags or split bags two or three ways. These bulk buys lower my grain costs- which gives me more money to buy things like brew gear!
I'm sitting on maybe 170 pounds of grain, maybe 100 ounces of hops (home grown), and 15 gallons of home brew. That grain and hops will carry me through the year. I haven't touched my gear in four months. Maybe in April, I'll set up shop- I'll spin out four or five 10 gallon batches over the course of a month. I'll close up shop and drink all Spring/Summer. In the fall, I'll pull out the gear, shoot out maybe 6 10 gallon batches. That out to cover holiday gifts and Fall/Winter.
I have to say, when I'm sitting in my friends kitchen and he complains that never has enough home brew I say, "Brew more." And he says, "I do- every other weekend." And I say, "No man, brew larger batches." And he says, "I can't do that." And two weeks later- I'm sitting in his kitchen AGAIN- he's working his ass off- and I'm enjoying a beer I made months ago. For me, brewing 'large' (10 gallons batches- which isn't that large)- is brewing smart. It gives me time for things like- being lazy in my backyard.