A perfectly logical answer. Also, weirdly, a wrong answer...
http://www.gamesas.com/index.php?/topic/1286166-hidden-stat-differences-based-on-race-selection/
It certainly affects NPCs, but from my experiences in both Skyrim and Oblivion, it does not affect the player character.
You can try it with NPCs yourself. Spawn a skeever or a mudcrab in town and then set it's scale to triple normal (3.0). While the normal sized creature will die in a hit or 2, the large ones will be able to kill everything in town.