In a word:
NOBLES
Dwarven nobility isn't simply satisfied that they have the finest rooms in the fortress.
Everyone else *MUST* live in squallor, or they fixate on it, and make your life miserable.
Heaven forbid that a peasant have a low quality puddingstone cabinet, if said noble has a fettish for puddingstone.
Prissy nobles can turn a happy, well adjusted fort into a mexican standoff really quick, since nobles are immune to the justice system, but the people they assault are not, and also suffer bad thoughts from being assaulted, and/or, witnessing or being otherwie impacted by such assault.
(Noble kills urist mcCatlady's cat. Cadlady has a fit, and punches a miner. Miner puts a pick in cat lady's brain. Catlady's husband goes on the warpath over his wife's death... on and on and on... all because Urist McNoble was "utterly traumatized" by "the pretentious living arrangements" of one of the peasantry.
Anything bigger than 5 squares is considered "too good" for peasants by nobles, because it raises the class of the room being an "adequate" hovel to being "modest", which is reserved for minor nobles, like the sherrif, the tax collector, the hammerer, and pals, though some of those may demand "decent".
Another consideration later on, is "rent", if you re-enable the economy system with DFHack. Rooms that are too fancy cannot be properly rented by their "owners", and people get kicked to the curb, and rooms go unoccupied.