I came across an interesting discussion over at the warrior forum on the pros and cons of small sites vs large sites in regards Adsense.

Although the question referred to Adsesne sites the discussion is relevant to any site regardless of how it is monetized.

Regardless of the size most seem to agree that sites must be topic specific.

I found the the post from Graig McPherson particularly good, especially the concept of 2 from specific which is a really nice way of targeting a niche without going to specific.

You can find the discussion here