Not sure when this happened, but it was a while ago - the tag cloud used to have a range of text sizes from very small to very large, but now it seems not to use the very small ones any more. The css in the theme goes from .tag_cloud /s1 to .tagcloud .s20, but for items with only one user and no other info, the tag is .s14.
Is this a deliberate change? It does make the block take up more than an entire screen height on a large LCD. If it is (accessibility?), then maybe a config option to re-enable the small sizes?