Regardless of guild size, the old system (between size bonuses and decay/account) applied a negative contribution to all less active players. Your stance is that the old system was "fair" and the new system isn't, mine is that the new system counts the contribution of all players no matter how little while the old system penalized association with players of low activity. Of course we'll be at odds.
Very Small guild of 10 vs larger guild of 51. Large guild of 51 vs. larger guild 260. The large guild of 51 will have a harder time keeping up with a larger guild of 260 in comparison to a very small guild of 10 keeping up with a larger guild of 51.
If we're talking about less work per player in larger groups. In a system where even a guild of 500+ accounts could, with a very low activity, stagnate in levels... even if you assigned a "reasonable expectation of renown gain" there's no way to make it "fair" because any player that falls under this expectation of renown gain are left at a disadvantage.
The flaw in this argument is that not doing blind invites is not exclusive to small guilds. Blind inviting and booting people that fail to meet criteria is not exclusive to large guilds. Some of the guilds I'm in, convince friends that play other mmo's to join this game. When actively recruiting, we won't stand around the harbor sending mass tells, we will make an effort to hop in low level pugs, help out and have a chat with some unguilded players.Again the flaw with what you and artos are bringing up is that small guilds tend not to do blind invites. Our guilds invite unguilded players we've run with before. If a player is active when we recruited them and we've quested with them before, the risk of such a scenario is very small. In fact it's never happened for our guild.
Real issue is as the guild matures, players focusing on TR'ing and end game content do not want to waste time on players brand new to the content. Have conversations with players you group with, just because they're guilded does not mean they didn't just randomly hit accept to a blind guild invite and found themselves unhappy there.
Players of low activity with a solid history of being a competent player find themselves having problems getting into smaller guilds of higher than the average activity. This is why we are even talking about how the small guild bonus is counter intuitive to inclusiveness.