Small characters have halved carrying capacity, IIRC.
And it's not the only problem. It's just the most obvious one. "I'm an agile waif, so I can't wield this greatsword that there's actually no reason I can't wield, and, in fact, if I do wield it, I do just as well as the strongman, who also does just as well with my light throwing daggers as I do," is the bigger one. You're reducing the archetypes available, and forcing mergers of them, and then telling players, "Well, if you want an archetype I have force-fed into another archetype, just pretend you're not good at things you are objectively good at."