Why is a model quadcopter 'better' than a helicopter? Why doesn't this scale up to the full-size versions?
Cheap MEMS gyroscopes have been on the market only since maybe 10 years. Before you needed more bulky and expensive gyros. Also, cheap and powerful micro controllers which can process the sensor data quickly enough and can control the speeds of the four motors to stabilize the quadcopter have only been available recently. The third recent innovation was more gradual, but also the storage density of batteries was not available maybe 20 years ago. With modern LiPo batteries you can have flying times of several minutes where NiCd batteries only gave you a fraction of that time for the same mass.

For your second question: The reason is similar to why birds have not been scaled up to carry humans, like horses do. This answer should give a good explanation.