The strength of a decentralized network lies in the diversity of its nodes. A 10,000 x 1 network is more diverse than a 100 x 100 one. Diversity enhances resilience.
In a 100x100 network, a farm of 100 nodes might reside on a single server or within the same cloud region, a single hardware, network, or operational failure could disable all 100 nodes. The entire network would function more like one with ~100 independent nodes rather than 10,000 independent nodes.
A more significant problem is that if an adversary controls a certain number of nodes in a P2P network, they can attack the network in various ways, such as this attack recently discovered by Ren or eclipse attacks. Having as many independent nodes as possible allows honest ones to collectively prevent adversaries from causing harm.