Interesting question.

I just did about 20 minutes of research and this is what I found:

Hydraulic theory: brake fluid does compress but so little as to be insignificant.

Tubing does expand when pressure is applied. The bigger the tubing, the more it will expand. Enough to be noticeable? Opinions vary.

Bleeding: might be easier with smaller tubing.

Volume: we're not flowing fuel. Brakes function with very little flow. If ya don't believe me, do the math. It's about pressure. Larger tubing will flow at lower resistance. Significant amount? Doubtful.

The more I think on it, the more I expect the answer is going to be related to manufacturing costs, not performance.