It makes it happen a lot earlier, if the point (for me at least). The AI can get up to 40-ish vassal limit fairly easily and that's about two Empires worth of dukes. I prefer it at one Empire's worth myself. It's not so much about the power dynamic as the size dynamic. I'm firmly in the "large realms should be less stable" camp though; they are far too easy to manage even before using gamey strategies or exploits.