Ultimately, it's a trade off. Nozzles have a weight associated with them, after all, which is extremely important when launching something to orbit. For the first stage of a rocket, the nozzles are typically optimized for lower altitudes, as they will spend the most time at lower altitudes gaining speed. However, once they are higher up, their plumes become absolutely huge because of this. Once you get to high altitude or vacuum, the second+ stage nozzles can get pretty big and it becomes a tradeoff between how much weight the extra nozzle ends up adding.