why small ships

Here are some justifications:

1) Large hull requires large shipyard. I do not 
believe shipyard slippage construction costs 
increase linearly, more likely as a power. Hence 
large shipywards cost WAY much money, only 
exist in certain places, etc. and this tends to 
limit large constructions. Plus, someone 
observed the labour issues about keeping 
shipyard workers employed, for which smaller 
vessels are better. Also from a political 
perspective, spreading the military budget 
around is better too. More political capitol to 
be made if everyone's riding gets a small 
shipyard.

2) Large ship maintenance costs may not scale 
linearly either. Though I'm not positive.

3) If I have X large ships, or X*5 small ships, 
and I have Y worlds to patrol, if X is far smaller 
than Y, then there are a lot of places I can't be 
and even crappy little enemy ships can do much 
damage with raids, bombardments, and troop 
drops. If I have 5*X small ships, I can probably 
thwart this type of attack by distributing them 
around. They show the flag. They take on 
commerce raiders ( the real menace to any 
interstellar economy), they provide eyes and 
ears for intelligence agencies in many locations. 

4) In a system scale battle, they enhance your 
sensor net dramatically by bringing sensors on-
line in wide areas. 

5) They are more expendable. Lose one and it 
isn't the end of the world. Far better for recce. 
Lose a CH or CL doing this and there will be 
heads rolling at Fleet HQ. 

6) They should be more stealthy in a larger 
scale hide and seek game. 

7) They can do swarm tactics.

8) To make them effective, try replacing some 
of the beam armament with longer ranged 
weapons such as: MTM, SMR-ER, Beam-3, Pulse 
Torpedo. I find the P-torp DD (used in 
squadrons) can make a nasty suprise - take a 
run in, fire about 20 mu out, turn away. You 
won't take that many casualties without the 
enemy focusing a lot of firepower on you, and  
you will do him some damage if you roll even 
okay. And you can keep attacking (superior to 
SMR-ER in terms of longevity of threat on the 
battlefield - though SMRs give good one off 
punch). 

9) A Navy is not just called to fight wars. It must 
transport diplomats, it must show the flag to 
resolve local disputes, it must do customs 
patrols, it must do search and rescue, it must 
perform mercy missions. Use big ships to do 
this and you incur an awful expense. Use a small 
vessel suited to the task (tailoring smaller 
vessels is also undoubtedly simpler - larger 
ships tend to be generalist in nature). 

10) I agree with the advice about trailing or 
flanking. I don't agree with the "firebait" advice. 
If your escorts preceed your force, they usually 
are 1 RB closer, unscreened, and can be 
induced to threshold with very minimal difficulty. 
So very light amounts of fire render them 
combat inoperative. The same fire would, if 
directed at larger vessels, need to be far more 
concentrated (range, sheilds, long damage 
rows) to do anything useful. I can kill a large 
number of beam 1 armed corvettes before 
they ever see engagement range.... and thus I 
destroy say 10-15% of your total NPV before 
they can be combat effective (if I myself have 
opted for an all large ship fleet). So try to get 
long range weapons for your small guys, park 
them behind the fleet (unless using them as 
scouts, and once they locate the enemy, they 
should be beating thrusters to get away to 
safety having done their job) or off to one side, 
thus presenting a threat "for later use". I don't 
like small ships as PDS escorts, they tend to 
attract fighters, SMs, MTs, and lots of beams 
thus stripping the formation of PDS. I happen 
to be a strong proponent of the light to 
medium cruiser (or larger) PDS barge (if in the 
kind of environment that merits heavy PDS). 

Sorry for the long commentary. But there are a 
number of reasons to have small ships, but 
they tend mostly to revolve around detection, 
dispersed force capability, and campaign 
considerations that don't appear in one off 
battles. If they are at a one off, they'd better 
have some long range teeth and stay out of the 
enemy gunsites for the early stages.