More likely because Microsoft knows that a lot of computers don't have that much free space, so only sending you what you need means using less of your disk space. Also, users often have data caps, so keeping the amount of downloaded small helps them there as well.

No, it's not about a trade off. The system needs to figure out what to update, and if it is safe to do. There was an article from MS some time ago on the topic. Most of it has to do with shared dlls I believe, but the details are a bit hazy.