One reason is cost. Large size means there’re fewer chips produced per wafer, which means every single chip will cost more, proportionally to the area of a single chip.

Another reason is yield. Defects are inevitable. Their probability per unit of area is roughly constant, i.e. it doesn’t depend on the area of a single chip. Therefore, the probability of one or more defects on a single chip is proportional to the exponent of the chip area. With larger chips, that exponent grows very quickly.