> With a bigger block size what hardware constraints begin to appear?
Mostly it is an issue of disk space and network bandwidth. right now a 1 MB block is produced every 10 minutes. That has to be transferred over the network to every node and each so called "full node" has to store that block. The total size of the Bitcoin block chain for all time is currently ~100GB and grows 1 MB every 10 minutes under current conditions. If the block size grew too big that you couldn't transfer a block within the 10 minute space between blocks then your connection is too slow to run a node. On the disk space front you can run what is called a "prunning" node which discards older parts of the block chain that are no longer relevant which reduces disk space requirements greatly.
There is also the issue of the initial blockchain download where when you are setting up a new node you have to download 100GB of historical block chain data to catch up to the current state of the network. These are all solvable problems though and Bitcoin's inventor envisioned that some day full nodes would be run out of data centers on heavy duty hardware. Small block supporters have argued that that hurts decentralization because some poor guy in Africa can't run a node on his Raspberry Pi and 3g internet if the block size gets much bigger. On the other hand if you are too poor to run a full node with a larger block size then you can hardly afford to pay huge transaction fees to transact on a network with a constricted block size so the whole argument that limiting the block size decreases centralization doesn't really hold water because in the end it limits user growth which is the ultimate decentralization mechanism.
> So the motivation is strictly monetary?
I think so. This whole stink started because some guy who happened to have a ton of BTC was upset that people running full nodes didn't get a cut of any of the transaction fees. Today, the main company that is pushing the Segwit / small block agenda hopes to push everyone to their off chain lightening network where they can collect the fees instead of the miners. Miners don't want to do anything that will jeopardize their profitability long term and keeping the block size too small limits their ability to control the supply of their product (block space).