the issue with smaller barrels is their higher surface-to-volume ratio. the smaller the barrel, the higher relative amount of surface area it will have.
imagine a sugar cube. say each side has a surface of 1, so the total surface of the cube is 6. now double the volume by gluing on another sugar cube. does the surface area double? no, because a side of each individual cube needs to touch in order to make the new double-volume shape. the surface area is 10. if you quadrupel the volume buy gluing 4 cubes together, the surface area is 16 - volume is 4 times greater, but surface area isn't even 3 times greater.
so the reason you might want to wax a smaller barrel is to limit the relative amount of wood - a porous material - is exposed to air.
another way of looking at it: 10 gallons of beer will oxidize faster in two 5 gallon barrels, vs. being in one 10-gal barrel. therefore, in order to get the same rate of oxidation, you would need to wax part of the 5 gallons barrels.