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Bethesda Talks DLC Size and Limitations
Gamasutra has an interview with Pete Hines, product manager for Fallout 3, about Bethesda's philosophy for DLC, and how it's changed over the years. Quoting:
"All these people are out there playing our game by the hundreds of thousands on a daily basis and we want to be able to bring those folks something they could do in a much shorter time frame, rather than just saying, 'See you next year.' That instantly ruled out doing a big expansion because those things just take so damn long to do. So we started looking at the biggest stuff we'd done that people really liked, but that we could do in smaller, digestible chunks. That's where we came to the Knights of the Nine model — it's substantive and it adds multiple hours of game play and new items, but we can do it in a time frame that allows us to get it out without waiting forever. That's what we've gone for with Fallout 3."
The point of the article, though, isn't whether they should make DLC. It's whether they should do additional content in a DLC or as a full expansion. If you remember Morrowind, there were two huge expansion packs (Bloodmoon and Tribunal). Each with an amount of play almost equal to the original game.
But Knights of the Nine, a DLC for Oblivion, only gave 10 - 15 hours of play (that of a standard primary quest line).
Easier and quicker to release and sold for less than an expansion.
Personally, I'd like an expansion over DLC (if this is the given choice). I'm ok waiting.