Why smaller navies cannot simply choose bigger ships

If steel and hull volume are relatively cheap, why have navies chosen smaller mainline warships?

The limiting cost is often shore infrastructure: yards, ports, and dry docks must be large enough to build and maintain the ship.

Norway's inability to accept the enlarged monitor Gorgon after World War I illustrates a limit imposed by shore facilities. The account explains that wartime bulges made the hull too large for the available Norwegian dry docks. A ship could therefore be useful and still be impractical for its intended navy. Dock dimensions and the cost of expanding facilities belong in the comparison alongside the hull itself.