You’re right that Bitcoin’s block size is limited (1 MB base size, ~4 MB weight with SegWit), and historically, larger transactions haven’t caused immediate catastrophic issues. But my point about second- and third-order effects isn’t about disk storage alone—it’s about the long-term incentives and pressures on the network’s decentralized structure. Let’s break it down:

1. Larger Transactions and Node Burden: You mentioned that disk size isn’t an issue as long as UTXOs fit in main memory. While storage is cheap, running a full node involves more than just disk space. It requires bandwidth, CPU, and memory to validate and propagate transactions. If larger transactions (e.g., excessive OP_RETURN data or bloated multisig setups) become the norm, the cumulative effect increases the resource demands on node operators. Over decades, this could discourage individuals from running nodes, especially in regions with limited hardware or internet access. Fewer nodes mean a more centralized network, as only well-resourced entities (e.g., corporations, data centers) can keep up.

2. OP_RETURN and Spam Concerns: The debate around OP_RETURN (currently capped at 80 bytes) isn’t a hoax—it’s about balancing utility with efficiency. OP_RETURN is meant for small data commitments (e.g., timestamps, hashes), not arbitrary data storage. Some argue for increasing its size to support use cases like inscriptions or token protocols, but this risks bloating the blockchain with non-financial data. For example, in 2023, Ordinals and Inscriptions caused a surge in transaction sizes, with some blocks approaching the weight limit, driving up fees and node sync times. This isn’t theoretical—Bitcoin Core developers like Peter Todd have flagged these as vectors for abuse that could strain the network if unchecked.

3. UTXO Set vs. Ledger Growth: You’re correct that the UTXO set (currently ~100 MB) is the critical part for node memory. But unrestricted transaction sizes or spam (e.g., via excessive OP_RETURN or dust outputs) can still bloat the blockchain itself, which nodes must download and store. A 1 TB drive might handle today’s ~600 GB ledger, but if spam transactions grow unchecked, the ledger could balloon faster than necessary, making initial block download (IBD) for new nodes slower and more costly. This subtly pushes smaller operators out, concentrating node operation among fewer players.

4. Historical Context and Future Risks: You noted that larger transactions happened in the past without collapse. True, but Bitcoin’s scale has changed. In 2017, the block size debate led to SegWit to optimize space without hard-forking. Today, with millions of users and growing adoption, the stakes are higher. If we normalize inefficient transaction practices, we risk a tragedy of the commons where short-term gains (e.g., stuffing data into the blockchain) erode long-term decentralization. Look at Ethereum: its state bloat (~1.5 TB for a full node) already makes running a node impractical for most users, centralizing its network further.

5. Course Correction as Immunity: My point about “course correction” is that Bitcoin’s community—developers, miners, and node operators—actively debates these issues (e.g., on X, BitcoinTalk, or dev mailing lists) to prevent harm. The 80-byte OP_RETURN limit, spam filters in Bitcoin Core, and fee market dynamics are examples of this immunity. Ignoring these safeguards could weaken Bitcoin’s resilience over time.

If you think this is still exaggerated, consider this: Bitcoin’s value lies in its decentralization. Anything that incrementally raises the cost of running a node—whether through spam, bloated transactions, or unchecked data—chips away at that. It’s not about an immediate crash; it’s about slow, compounding effects that could make Bitcoin less censorship-resistant in 10–20 years.

Bigger transactions might not break Bitcoin today, but they’re like termites: slow, sneaky, and centralizing the network over time.