There's no doubt that if I were creating my own TU that I would start with only a sector & that none of the interstellar states would be bigger than a sector.
(There's no doubt, because that is exactly what I had just starting doing when the group decided it was finally time to try CT. I wasn't ready to use MTU yet, so I choose OTU.)
That said, I don't know that the 3I is too big. I think both situations can work just fine. Indeed, when I look at the 3I map, I think it could be a lot of fun to be able to cross several sectors without leaving the Imperium. There's certainly plenty of interesting borders, non-Imperium areas, &c. to use if you want. Arguably just about any advantage a smaller Imperium would have could be found on the fringes of the OTU's 3I.
FWIW, my group has visited three subsectors in about six months of game time. (Hmm...it's been about six months of real time as well...) At the moment, it looks like things could go either way. Either they'll stick around the same three or four subsectors or they'll end up visiting three or four more.
They've definately followed the spirit of the game's name. Much more than I remember being the case in my old CT games. (Though, that may have something to do with differences between my old referee & myself.)