I have zero idea from a canon / expanded canon etc. perspective, but putting my worldbuilder hat on, if I had to come up with an excuse, I'd say that getting a stable, contained beam like you see in a lightsaber requires a power concentration that would be sufficient to power a full-size lightsaber. Getting something smaller would require intentionally reducing the range of your beam to less than what your equipment permits. Therefore, since you're paying for the full-size beam in the first place, so to speak, it doesn't make sense to have a smaller blade. No idea if anything in canon contradicts this idea though... if it does, then yeah, why the heck don't we have light-knives, they would be hella cool in a variety of situations.