I don't think DNN is too large, it's al about decisions.
There's been some good decissions but also some bad decissions.
Splitting the project in subprojects was probably the best decision ever, it really revamped the modules. even tough it seems new modules only get released together with new core versions.
Taking in the forum/gallery/blogs was in my opinion a bad decision, they shoud have been designed from the ground up for tight integration in DNN. Taking the forums from asp.net to Dotnetnuke.com is probably a good decision, but a litle badly implemented, partly deu to the limitations of the forum module. The agregated view was implemented because dotnetnuke.com needed it. It could have been *foreseen* and a better module could have been designed.
Supporting both platforms 3.2 & 4.0 was a good decision, but implementaing the new functionality in 2 platforms at the same time 3.3 & 4.3 was a bad one. At this point it should have been choosen to start working on DNN5 and dump ASP.NET 1.1. Then norm should have been more developer features, tighther integration with .NET2.0 get rid of all that code that returns *arraylist* and replace with a clean generic list, implement a better exception handling subsystem (see enterprise library) The new membership system should have come after that, not before.
As far as commercial module developers go, your support for DNN4.x has been bad. The intellectual property argument is worth nothing, because of Reflector. Most modules get sold with their source anyway so why not sell it source only, why not get VB.NET express and make a DLL, takes 5 minutes, oops it could take you yet another codebase to support, not really but you'd have to try before you find out it works! You guys are just scared you'd have to support 2 codebases at the same time. It's time to Ditch DNN3 & ASP.NET1.1. If your host doesn't run ASP.NET 2.0 yet, your giving your money to a fraud, get another one.
Getting the core modules to ASP.NET2.0 would be a step forward as well (long live generic list). It give an up to date developer the chance to do his work. You have to know I do all of my work on XP home (most cheap PC's get soldwith XP home) M$ has learned Visual studio 2005 runs on XP home, SQL server runs on XP home, but not DNN, the core does, but no modules.
Some client asked me to make a small adjustment to Text/HTML, I ended up converting the source to .NET2.0 because I've lost my copy of VB.NET 2003 PRO 
(wich doesn't work on my new, cheap, XP home system anyway)
I still think DNN rules, but 3.1.1 set a mark, and I have yet to see a release that makes me just as happy and supports generics at the same time
So far my 2 cents for today, If I find another 2 you'll know 