Technology is definitely a factor in allowing more complexity.

We didn't have the idea of "total war" until the 1850s and the Crimean War - nations in prior eras didn't have the resources to conscript the bulk of their fighting-able population, equip them, transport them, supply them, and command them. Industrialization allowed for en-mass conscription, the railroad made transportation and supply chains efficient, and the telegraph and refined clockwork made it possible to run a war on an intricate schedule.

Today our big change is in information technology, allowing the government to enact more powerful policies with less overhead. If we can do this right, we'll enjoy both the smallest and most efficient governments in history.

Has any government ever gotten smaller without a revolution/foreign takeover? Honest question.

doesn't the trend to outsourcing many governmental services makes governments simpler?

The government has to outsource in a governmenty way. So in the US, they're not allowed to unfairly favor one company over another (at least there are rules trying to prevent it). This makes the steak and strippers kind of selling illegal, and employees of contracting companies are legally required to go through training on how not to bribe officials. Companies have to re-compete for contracts they've already won. Then you have subcontracting, which leads to situations where your boss works for a different company than you and isn't allowed to know your salary.

Maybe it makes things simpler for the government itself, but probably not to the extent that it could.

I think the author gets a little carried away with his thesis in blaming the fall of the Roman empire on complexity.