Wouldn't a full node use nearly the same space for large or small block sizes?
I think the logical issue with that argument is the assumption that larger block sizes = less # of blocks. More likely, the number of blocks would stay the same (a block is "mined" into the blockchain about once every 10 minutes). Thus, the capacity of the blockchain would increase. 

Only if you assume that the number of transactions currently being "saved" into the blockchain is the upper level of the demand for such transactions would the storage size not be affected by larger block sizes.