Sometimes bale size is dictated by equipment other than the baler - like what you're going to move the bales with. We don't like bales much over 600 pounds because the hay spike on our tractor can't handle much more than that.
Its pretty much dictated by choice. We buy ours from a neighbor. He has one prairie hay pasture that we lease from him. He bales the hay (round bales) in whatever size we want.
As Maura said we want them on the smallish size since our tractor has a hard time with anything over about 900 lbs.
He bales his brome hay into 12-1500 lb. Bales. When we have to buy any of those its tough on our little tractor to pick them up.
I think they set the equipment to 2-8 foot size bales but not sure. I know they make most hay feeders to fit an 8 foot bale which I believe is the largest.