Michael Fremer's system

+1 Douglas

There is no doubt that provided you can get enough distance away from a large three way for driver integration and still have at least 3 feet behind the listener to any wall then the bigger more dynamic speaker is going to be better!

The only issue with small rooms and big speakers is the bass. Too many big Wilsons, B&W, Focal and countless others have a big bass hump which sounds awful in a small room. Also there is a natural bass boost from the roo  below 60HZ - so a 6 db per octave roll off usually is better than flat or boosted bass hump.

Shadorne, your point is valid about the bass hump. The Vapor Audio Joule White (reviewed) has a circuit which addresses that, and it's quite significant in its effect. It's a valuable feature of the speaker which I use depending upon the system. I can see some being put off enough by the bass hump that they would opt out of the larger speaker. Personally, if I had to live with it versus a less capable speaker, I would. Thankfully, I do not have to. But, a great deal of bass contouring can be done by treatments, amps and cables, much less the source. It's not like a person is stuck with wretched results simply because of a bass hump. 

We have people thinking they should expect ruler flat response and supposedly "perfect" results. Not gonna happen in probably 95+% of rooms. Of course, you can simply cut out a ton of low end! Problem fixed. Except for the fact it's not as convincing a reproduction of  the real music experience. :(  Who needs LF? The music lives in the midrange, right? Ugh. Like putting a speed governor on a race car. 

Someone will mention subs with a smaller speaker, but you are still stuck then with the compromised mains. 

You also bring up a good point in regard to driver integration. Everyone is different in how accepting of less coherence they are. Having used coaxial and full range speaker drivers I can appreciate that caveat. 

@robd2 made an interesting point about the records with the room acoustics.
My concern with large speakers in small rooms is the issue of bass. Simply put when we go lower in HZ the wave becomes longer - that is why bass is so hard to damp and control. In addition to this a small room simply won't go low -I though that is a scientific fact (or have I got that wrong?) - I always thought the whole point of large multi driver speakers is largely their dynamic range - in particular the bass.

MF system makes me uneasy about everything I think I know about hi-end: I thought that I have an excuse for Not going after Wilsons because I cannot afford one of those castles in Malibu Colony... But...   coming from the Academy mind-set I have this "the authority" variable. And Mikey is The Authority to me, so unless I can walk into his den and get unimpressed, there is not much to discuss. 
As a sidetracking note: the Dude looks amazingly fit for an audiophile: I followed his ramblings 15 years ago and reverted back to analog, after watching this interview I am thinking about extra workouts ;-)

I haven't heard MF's system but have heard quite a few megabuck systems in inadequate rooms (too small, large, irregular, bright, ETC) to know that he is not getting anywhere near the sound he has paid for in that space. I would posit that a system costing a quarter as much in a dedicated room sized to the speakers would sound twice as good. I'm sure many of us have been around long enough to recall how Stereophile and TAS would periodically profile the room and system of each reviewer so that readers could reasonably contextualize their conclusions. This should be standard practice--not a solution to the problem of reviewer/listener bias/preferences but it would certainly go a long way to helping all of us make purchasing decisions where an in home demo is not an option.