I'm strongly against ANY group size limits (as well as "1 zoning group per zone" limit or any other limitations like that).
Look,
I'm a semi-regular player playing less and less every year. Approximately half of our player-base are like me. The other half are hardcore 24/7 players.
Now, when I join a zoning group, there is usually a core of 3-5 super-elite super-legendary hardcore players in shiny armor. Usually, the leader is one of those hardcore players. Usually, they could do whatever zones they had in mind on their own, but they accept me and other auxiliary chars to run along and get some xp, money, skills and secondary loads. They get little to no benefit from our assistance, the weak chars don't make the group noticeably faster or safer. In fact, taking "neutrals" (including the members of the minor clans) to an elite group is a pure act of charity.
I can't count the number of times last wipe when a friend told me: we would gladly accept you, but we already have a 10-person group. Too bad! Yet another day of soloing ahead.
Certainly, I can form and lead myself, but I'm not very great at it and it takes time. By the time I get enough ppl, I usually have just enough time for 1 zone, maybe 2. And once again, first I sit for an hour trying to get some ppl and then I get 5 tells in 5 minutes and I have to reject some of them because my group is already over-limit.
Now, if there are penalties for having a large group (let alone a hard group limit), the "real" groups will simply stop accepting neutrals at all.
Thus, reducing the group limit to 5 (or whatever; I dislike 10 almost just as much as 5) makes the game even more elitish and less friendly to a newbie or an occasional player.
One other important thing is that the _number_ of players in a group has nothing to do with the challenge of doing a zone. Not everybody is level30 and not everyone is legend and not every legend is rank 30. Trying to do Toede with a group of 15 level5 chars may be extremely fun and very challenging. For a lev30 char, there is neither challenge nor fun here, whatever is the group limit. Run in, kill the mob, loot it, go ahead.
And yes, I like zoning maza-style (maybe not all the time, but certainly on occasions). And for a group of occasional players who zone for fun the numbers make sense - what a major clan can do on 5, a minor clan can try on 15 (and still fail, but at least get some fun in the process). Even trying on 10 isn't worth the effort - the group dies way too fast.
However, once the group limit and other penalties are in place, we no longer have the choice - either zone like a professional or die immediately.
Now, as to balancing issues, there are certainly better ways to deal with it. One of the most obvious things is to add area damage (you need more heals to keep 20 chars alive rather than 10).
Another solution which is fairly simple to implement is dynamic mob loads (the more ppl are in the group and the higher level/rank are they, the more guards summon the king).
Certainly, the creative creators can come up with a lot more ideas.
Conclusion:
We don't need no stinking group limits. If the players start steam-rolling some end-game zone way too easily, let the creator take care of the setup of that particular zone.