Here's my logic: you can cook less but you can't always cook more. The #3 will do small smokes (a single rack of spareribs, 15 whole chicken wings, a 7lb butt) just as it will with a couple of packer briskets or eight racks of babybacks. With a large family you could "stage" your cooks where you prep, refrigerate and reheat without a significant drop in quality ... but a #3 would let you do a one-step prep.
If you're on the border line, I'd advise going big and adding accessories down the line; most of those who buy the #1 or #2 lament they could have put the next larger size to good use. Heck, even those of us with the #3 now wistfully stare at pictures of the new #4 ...
No matter which one you choose, I can say without reservation that you'll never regret buying the Smokin-It brand. If you have any more questions just give us a shout.