Basically, it's a matter of intake velocity. Your engine wants to draw a finite amount of air for its displacement. As that air goes through the carb (which is a restriction) it has to speed up to go through the carb throat. For equal engine speeds, the same amount of air must go faster to go through a smaller carb, or slower through a large carb. Of course, to a certain extent, a bigger carb means less restriction and more flow, which is why a bigger carb is better for wide open throttle applications like drag racing. The draw back is that when you get too large of a carb, you no longer have enough velocity to create an adequate vaccuum in the carb throat to pull fuel out of the float bowl. The result is a lean condition (like AWK said).
A larger engine or more efficient engine (ported) can succesfully make use of a larger carb (up to a point) because it can achieve the intake velocity to make use of it, but even so, there is a loss of throttle response traded off for the higher flow. That's why there is a limit to how big you can go. Power is great but so is throttle response, so you shoot for a balance that gives you an acceptable amount of both. For a Blaster, the upper limit seems to be about 36mm for a highly modded engine (barring single purpose drag bikes). Yeah, you can use a bigger carb, but you won't be happy with it.
(Geez, is it just me or was that kinda long winded?)