There's nothing wrong with large AOE weapons - with one exception. They can start interacting with unintended layers.
For example, gunships and transports aren't all that far above the surface layer - and a weapon like that, used on those lower level units, would very likely start impacting land units with AOE. That's a tricky issue. Also, AOE should be fairly agnostic, in that it's reasonable to assume that it could damage friendly units as well as enemy. Of course, that can be turned off, but it's there.
Just one last comment about large AOE. Due to the damage mechanics - AOE causes full damage within the radius of the AOE - that's very different from the reality of such things, but in order to balance it - large AOE weapons should require massive amounts of energy based upon the radius and the amount of damage they cause - think of it in the abstract of explosives in a large artillery shell. Same idea - and of course, the physical requirements of getting that much energy into flight, etc.