Why am I having "Time step too small" error for this circuit in LTspice?
Think about what happens in this circuit.

You made the current of B2 dependent on the current through R1.

Let's say 1 A is flowing through R1 so B2 wants to push 50 A up.

It is unclear how the direction of the current through R1 is defined, is left-to-right 
the positive current or not?

It is possible that the 50 A that B2 pushes up, increases the current through R1.
So B2 will multiply that change by 50 and push even more current up so the current through R1 increases even more.

Have you heard of feedback and specifically positive feedback? Because that's what I think is happening here. The simulator cannot find a solution as there is no stable solution.

The voltage at node 2 is getting out of hand, the simulator sees that the voltage at node 2 increases towards infinity (because the currents do the same).

You should not take the "timestep" error too literal, it is a consequence of there being no time delays (like a capacitor) in the circuit so the simulator will see too much change in a too small (actually zero) timestap. So it complains that the timestep is too small.

Try adding a - (minus) to the expression for B2: I = -50 * I(R1) and see if that helps to find a stable solution.