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True - but on the flip side, some features can also become infeasible once the audience grows too large. For example, in a very roleplaying-oriented mud a larger playerbase is going to result in less attention per player from the staff, and will also result in a "less personal" feel to the mud, whereby the player feels that they're just another insignificant face among thousands rather than someone who can actually make a difference within the game world. Equally, a particularly large playerbase is going to require more machine resources, which might become overly expensive for a mud which wouldn't or couldn't take money from the playerbase.
By its very definition a MUD is a multiplayer environment, and it's unlikely to ever be as much fun without player interaction. The ideal number of players is, like anything else, going to be a matter of opinion (and also depend upon the style of mud). But IMO this is still a separate issue from the mud itself; if a mud doesn't have enough players - or has too many players - for the style of game it promotes, then it's not going to be as much fun as it could be. But that doesn't mean the game itself is bad (or good, for that matter), only that it isn't operating at its full potential.
In an earlier post, DonathinFrye listed the number of players on various muds. One of your IRE muds had over three times the current playerbase of another of the IRE muds - but I'm sure you'd agree that that doesn't mean the former is three times as "good" as the latter, nor even that it's necessarily "better" at all.
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