The reason the industry moved away from high efficiency has a lot to do with the large size of typical high efficiency speakers.Not all higher efficiency speakers are all that large. Many 'full range' drivers can be quite efficient yet the cabinets are reasonable sizes.
ALL OTHER THINGS BEING EQUAL (That is the part people seem to be missing) a higher power amplifier will always be preferable. It will run less stressed and have much more headroom.The first statement is correct. The only problem is things are never equal. The second statement is simply false- it subscribes to the idea that 0.005% THD is 'low'. Its not low if that distortion is all higher ordered harmonics, owing to the fact that the ear uses these harmonic to sense how loud a sound is. It is this simple fact that is why solid state has a reputation for brightness- that's not coming from a frequency response error, its caused by distortion.
As for the higher distortion at lower levels of a power amp, even those higher levels of distortion is still well BELOW anyone's hearing so it is a moot point.
Why is everyone assuming that the make, quality and characteristics of an amplifier are changing when going to higher power ?Because they often do.
Given everything else being equal, there is no argument except maybe just the cost and power consumption, that going to a higher power is always better.The 'Given' isn't a given. One problem you can have is that higher powered amps usually also have more gain. If you put that amp on a higher efficiency loudspeaker, the noise floor can be annoying, the additional distortion (due to the amp operating below its point of lowest distortion) notwithstanding.
Do not equate going to a higher power, with also changing the quality. The two have nothing to do with each other.In this regard your statement flies in the face of conventional wisdom which is based on experience of many many people over decades! As a manufacturer we deal with this all the time: "Don't your smaller amps sound better?" Ask any manufacturer- they will tell you they get this question often.
We are one of the very few manufacturers that make more powerful amps that actually **do** sound better than our smaller ones- this owing to how we scale up our power levels. But most solid state and nearly all tube amps sound better in their smaller embodiments, so long as the speaker allows for the lower power.