SpaceX has a number of problems they need to resolve.
Surviving re-entry with a first stage, finding a target to land on. Controlling it all the way down.
The last step is actually landing it. The ultimate goal is to do it on land, but they need to prove to the FAA that they are safe to come in over land.
The fact that they have hit the JRTI twice (literally) is pretty good proof that they can hit a small target from almost orbit. (Edit from 2017 - they have since landed over a dozen times, split between both ASDS barges and the LZ-1 pad on land).
If they trash their own landing pad, that is kind of their problem. If they hit anything else on the way down, that is the FAA's problem.
Thus JRTI has served well. They still want to keep it for later landings for missions where the payload requirements mean not enough propellant margin for boostback to the landing site. Downrange landings. Especially for Falcon Heavy since the side boosters will usually have enough propellant margin to return to launch site, but the core booster wants to go higher and faster, so coming back is harder and more expensive in payload reduction. So landing downrange means recovering the stage vs not recovering it at all.
They are building the "Of Course I Still Love You" ASDS for the West Coast launches for the same reason. (Edit from 2017: In the end, JRTI's wings were removed, placed on top of a different Marmac barge, and taken through the Panama Canal to be the West Coast barge, and a new ASDS, OCISLY took over Atlantic duties).
They now just have to fix the issues with landing, which they think they have in hand. So a bigger deck would not really help much.
Looking back at this answer a couple of years, and 15 landings later, it seems like they have no trouble landing within the outer circle, let alone actually hitting the X. So turns out the size is just about correct.