I think the same thing, and then I went a little smaller! I went to a large split then to a 58 key split, then to a 42 key split. At 42 I saw no advantage in going smaller other than it being smaller if you liked the look of it.
Then I wanted to try a small dactyl and that lead me to an already designed 36 key split and I love it. I lost some more keys and found that I can easily handle that. I would not say that the move from 42 to 36 made it more ergonomic but not worse.
While I went from 42 to 36 without thinking there were downsides, I think going any smaller does start to compromise functionality for the sake of form.
At 36, I think that even on a bigger keyboard I would emulate the layout I have now as it is so easy.