I'm leaning more towards NEC pricing range for developers. Sure, the PCBs are thin and the roms tend to be blobs instead of chips, and there's a hucard plastic card instead of a case, but once you setup all tools and such to manufacture this stuff - hucards aren't any more expensive than carts.
I would say two things, pricing from NEC for larger roms. And the CDROM itself. What's the best way to make the CDROM system shine? Make sure the gap between the games, is enough of a difference warrant the purchase of the addon. There's an audio in line on the hucard port, yet no hucard game uses it. Why didn't we see audio upgrades for hucards? Because that brings the difference between hucards and CDROMs games, that much smaller in difference for audio. The Megadrive/Genesis is the has the same situation; has stereo audio in lines for the cart - but never upgraded the audio via cart - even when the sound of the system started to show its age against the SNES/SFC. MegaCD/SegaCD. That was your audio upgrade. Anything you do on the cart side, starts to negate that audio difference.
Addon chips aren't as expensive as you think. Nintendo actually added DSPs to SNES carts that did nothing more than decompress data. That chip was cheaper than simply throwing more rom at it.
There's an article that refers to the PCE as the 'core' system (before the 'core grafx' system even came out). The CD system already was in development when the original PCE launched. From a marketing stand point, I would want the CD addon to be as a big of a jump as possible to regular hucards. Limiting hucard sizes, is one way to mitigate this.
Part of the reason, at least for the first year, might be been that they didn't have the tooling setup for larger roms yet (remember, these are glop top - not just simple dip mask roms). But that doesn't explain why sizes remained smaller after the first year. I'm putting my money on the CDROM addon as the culprit.