Or they had techniques to miniaturize things.

Which is not out of the question; scaling a drawing up or down can be done with pretty simple tools (this is how a couple guys in Kentucky reproduced a Nazca-style giant figure back in the 1980s, with no access to flying saucers or mystically-levitating priests).

A pantograph is a simple machine that came along quite late. I can imagine a similar machine for carving, but I think it's quite easy to view the past with our own perspectives. The pantograph, and this speculative carving machine, are labor saving devices. I assume the Minoan sealstones were custom-made, one-of-a-kind items for those important enough to use them. While labor was cheap in most cases, those in need of this specialized skill were able to pay the cost.

No, the details were originally that small.

I think the question is less about size than about deterioration. By analogy - old documents are hard to read sometimes because ink has faded. So the question is more like: is the size the problem or is it the fidelity?