Why is there no middle ground between tornadoes and hurricanes?
Tornadoes are the result of small-scale effects such as the convergence of updraft/downdraft regions in a single thunderstorm, the stretching or entrainment of vertical vorticity, wind shear profiles, and even friction with the ground.

Hurricanes rely on massive amounts of latent heat release from an atmosphere moistened by warm ocean waters causing rising air and lower pressure over a wide area.  This allows the Coriolis effect to act, sculpting airflow into a spiral pattern.  Under normal conditions, the Coriolis effect is only applicable over a large area (don't get me started on the toilet myth).

There are some intermediate types of circulations.  A mesocyclone is roughly city-sized (and these are often associated with tornadoes).  A mesoscale convective vortex can form out of a thunderstorm complex and are roughly state-sized (usually more of an Indiana than a Texas).  There have been very small hurricanes and typhoons (look up Tropical Storm Marco or Typhoon Tracy).  

Extending the scale upward, the normal "synoptic" low pressure systems associated with cold and warm fronts and usually bigger than hurricanes, and upper-level circulations can be continent-sized.