Those two go hand in hand. You can't increase area arbitrarily. The more area your chip has, the less yield you get, which in turn makes it uneconomical to produce.

The reason is simple, even a single manufacturing fault can make a chip unusable. If you assume e.g. a fixed number of faults per wafer, you can easily see how increasing the chip area increases the area you have to throw away for every fault.

As you wrote, the semiconductor business is very capital intensive, so no one can afford to do that (except for some niche applications, like R&D, space, etc.).