Oddly enough Bigger isn’t always badder.
A lot of the physically largest demons are III’s and IV’s. I sort of think of it as maxing out physical prowess before magical prowess starts to increase.
Now, maybe Arch demons and Princes are really super huge and burly, but they typically don’t go around like that as it’s hard to get through doors, cave entrances, [i][b]sit on furniture,[/b][/i] etc. when you are 60 feet tall or taller.
So they, I assume, take on smaller forms.