You guys are missing the point. Crytek is not making a gameplay decision, they are making a money decision.
The ancient, decrepit, piece of crap hardware in the PS3 and Xbox 360 cannot handle over 12 players. You have to realise that they are trying to push a graphical game on a 7800gtx, a graphics card that COULD-NOT-PLAY the original Crysis on anything over Low+640x480.
If they make a two tier game, with 32 player PC and 12 player console, the console gamers will cry foul and sales will fall.
For this reason, PC gamers who have moved into the year 2010 and actually have decent graphics hardware will suffer.
Technically the PS3 can hold hundreds of players however the graphics are to low for crysis. This 256 person FPS (MAG) proves it is possible but would it feel like crysis if you feel like you were playing an indie game on steam. I think that this is why the games are smaller at least on console. A squad system for 16 v. 16 would be awesome on PC though. XD
Wasn't there a game last year at E3 that showed 120 people playing a giant battlefield game with squads and tactical decisions for PS3 I recall seeing that.