Your statement that in Power 1.0 larger ships produced more power is correct, but what you seem to be forgetting is that larger ships also used more power thus larger = more power isn't an issue.
If size were not a balance issue, then the meta for competitive combat ships wouldn't have been ships perpetually on the bleeding upper edge of the size spectrum to the point that they frequently lagged & even crashed servers when jumping to large bases to to each other if (god forbid) one or two players happened to mining real hard someplace else at the same time. Every time a performance improvement came through, this eased for a short period, then the size of PvP titans rose. Because size was always OP.
Size has been an OP meta throughout the entire history of the game. No softcap or other penalty imposed has changed that enough to see a real change in the
result. To say the relationship between size and power in 1.0 is not actually an issue is incorrect.
The proof is in the pudding - tell me which server without admin-enforced limits had a PvP meta that saw
decreases of size in combat ship preference over time as players improved their meta. It's never happened.
You can point to Veilith and others using smaller ships to wreck noobcubes, but those are poor examples because of the tech & experience differences, and did not -
could not - result in a change to the size meta because as opponents adapted to new technology that slipped out, they still trended towards larger ships to outclass opponents with relatively similar tech levels.
Size in Starmade is - and has always been -
imbalanced.
Until there are equally valuable reasons to go small, and those reasons are valuable enough to show themselves as such by a change in the way people play, an imbalance is indicated and no argument about the math of mechanics, no tossing around emotive terms like "nerfed" and "penalized" to paint large ships as picked-on and gimped, none of that can dispel the
actual evidence of how good players wage war against each other, and they don't do that shit in fighters and frigates. You don't see ships under 20K at a serious fight, because they are too underpowered.
The temptation may be to argue that this is "just natural" or "common sense" because "bigger is stronger," but ebola is a single-celled organism. We don't make fighters IRL as big as possible for more power, we don't group troops in clusters as large as possible for combat, many animals & plants have evolved to smaller sizes over time to take advantage of the benefits.
Small size has legit advantages. That's a fact in life as well as in fiction, and this game has
never reflected that reality.
New systems fundamentals designed to change the actual gameplay value of size (and other issues) was absolutely necessary.