Scope and nostalgia aren't related. PSX-era RPGs were created with camera fixing, overhead view, and lower detail, so large areas could be camouflaged into small regions; current era full 3D free camera RPGs require FAR more assets to replicate the experience.
1: you can't hide anything beyond the viewing angle of the camera;
When looking at how Takahashi and Monolithsoft do games today, you have New LA, which is a city roughly of the same scope as Bledavik, which is the capital of Aveh.
New LA is one of the largest cities ever created in a console RPG. It is larger than most (if not all) of the cities in Xenoblade Chronicles 2 combined. Bledavik and Nortune are two similar scaled cities. A Xenogears in 2020-2025 would look like Xenoblade game with Xenoblade conventions, not a city map with areas you can enter like Chrono Trigger with no option to look at around your surroundings beyond what fits into the overhead camera view: that would be disappointing.
But you are making one very wrong assumption: That Midgar, or any other "gigantic" city on any of the PS1 era games would be recreated completely, that the whole city and even the worldmap would have to be recreated with maximum detail and whatnot.And thats simply not true.
For you to have a magical moment in Midgar, for example, you wouldnt have to recreate the whole city, but just the areas that you traverse through.The same would be apllied to the overworld.You wouldnt make a overworld with the same level of detail of Midgar, and it wouldnt be 1 to 1.It would be just kind any other modern game like the Witcher 3, or FF 13 before it.Priorities would be estabilished, and the game would be created.
I mean, just look at Beyond Good and Evil 2 and its scope.The developers wants to create god knows how many worlds that are fully explorable, with living cities that you can travel to every street and house, amd it will all be presumably fit into one game.Or cyberpunk 2077, that also has a gigantic living city, with god knows how much more.
So whats the difference betwenn the eras?Why are PS1 games so much more ambitious in scope if they were ever to be brought to current consoles, versus games being made right now.Simple:Nostalgia.We have such fond memories of the old games that we have played, that we imagine them not only being bigger than they were, but that its ambition were something that cant be replicated in todays world without an unprecendented effort behind it.