Turbos work by controlling the expansion of fluids flowing through them. (Compressed gasses are considered fluids.) A certain volume of gas enters and is expanded in a controlled manner, allowing the gases to impart their energy (there are also thermal and pressure wave effects happening, too) to the turbine wheel which does work on the compressor wheel. Allowing for maximal expansion post turbo increases the pressure differential pre and post turbo, which makes the system more efficient, which is a good chunk of the reason why bigger is certainly better (with some caveats left in for minimizing turbulence which hurts flow tremendously in expanding volumes), giving the effects of faster spool and more power overall.
There IS a risk of compressor surge, though, but there are many factors that come into play with each particular turbo design.