I like having stars. Last year I had A-Rod, Kinsler, Morneau, Carlos Lee, Haren, Soria, and Santana on the same team. That's WAY more fun than having a bunch of Jason Kubels and Luke Scotts. It's still challenging to work the waiver wire and pick up the next big thing..
20 teams would be ridiculous. Just think of how insane that draft would be. Teams 1-5 and 15-20 would be screwed and there would be no draft strategy at all. The draft is the most important thing since the vast majority of a team's permanent players are selected there. Gotta give everyone a fair chance to form their teams the way they like. Theres a reason most leagues have a max of 12 teams.
Last year we had 16 in league 2 and almost half of them didn't even participate. The more the teams, the more likely a manager will give up early