My club has just 1 member, but we get along great.
We (that is, I) tried out the first clash today just out of curiosity - will try most anything once, but don't expect to win any great glory.
I can see some rationale for providing incentives toward larger clubs, but it's not entirely persuasive.
I think setting up clashes where specific clubs agree to compete against one another makes more sense. Could use a format similar to the Ryder Cup. Then clubs could choose to compete against others of similar size etc.