Patrick,
I might disagree on the comment that the course size should depend on the instructor's other full time job since you are paid to do a job and if you can't handle that with your other responsibilities then you probably shouldn't be teaching that many courses....However, I absolutely agree with your second statement that it should be based on the number that can be reasonably taught with the proper feedback and interaction. For many that ratio is around 15-20 but it can vary based on the level of the content, the type of course (writing, etc.).
Herbert Brown III