wouldn't it be more cost effective to have more capability within a lower number of larger vessels?
That's where you get into questions of hi-lo capability mix of quality vs quantity.
If you're limited to only ONE class of ship (in which case, there is no hi-lo mix) then yes, you'll want more quality in lesser quantity so as to have a higher lower bound of capabilities in fewer ships. But if you DO have more than one class of ship (allowing for a hi-lo mix) then you're going to want to have quantity over quality for the low end feeding decision making on the mission tasking of the more capable high end quality assets that are fewer in number.
Type-S is the bare bones basic quantity over quality in order to get a preliminary view of phenomena to generate the first pass data gathering in exploration and survey that can then be used to determine where to assign more specialized assets
By having "more lo" in the hi-lo mix, the IISS is able to "cover more
ground space" with their scouting and information gathering ... to the point where the bare bones basic Type-S is so ubiquitous as to
not be worthy of note ... meaning no one is interested (by default) in whatever a Scout/Courier is up to when encountered. They're small, they're inoffensive and whatever they're doing is probably routine enough to bore anyone inclined to be nosy. That kind of generic default acceptance is a valuable commodity for the service ... to the point of being "You don't need to see our identification..."
{hand waves while using psionics} when it comes to blending into the background and not being worthy of concern or even passing interest.
In other words, high quantity/low quality assets do not "tip the hand" of reconnaissance interest (or focus, if you prefer) like more capable and specialized ships do. That kind of "flying under the radar" through sheer ubiquity like that enables all kinds of mission tasking for preliminary information gathering without necessarily arousing suspicions (at home or abroad).
You don't get that sort of "ho hum, nothing to see here" default reaction from higher quality/more capable starships with more specialized equipment and capabilities onboard that are far fewer in quantity.
Familiarity breeds contempt ... as the saying goes ... and the IISS has built enough Scout/Couriers over the centuries for them to become familiar enough to that their "threat level" when encountered basically equates to contempt (as a threat). That very familiarity=contempt equation then creates a very permissive environment for all kinds of information gathering mission tasking (as I alluded to above) because who is going to want to go to the trouble to keep track of what every Scout/Courier is doing (aside from the IISS itself, of course, and sometimes not even they can be bothered with the admin needed for that). If you've seen one, you've seen them all ... or words to that effect ... and boy howdy are there a LOT of them!
So you want to be thinking in terms of
Scout/Courier "goes first" and if they find something interesting, a
Lab Ship can be dispatched with specialists for a more detailed follow up. That lets the "lo end" ships fan out and cover more
ground space in order to give the "hi end" ships better prioritization on what to investigate.