A couple of points.....
Using a feature as a turning point rather than reference to a runway - it cuts the workload for both the instructor and the low-hours student. Saying 'turn base over the lakes' is lot easier than saying 'look over your shoulder and when the runway is at 45 degrees etc etc' when the student is struggling to fly S&L. That sort of finesse can wait until the student is more aware of whats happening.
Obviously, the turning points have to be chosen to give the correct runway reference, there is no point in saying 'turn over the blindingly obvious lake' which is 5 miles from the runway when there might be a smaller, but less obvious feature in exactly the right place.
Bomber circuits; I try now to keep my circuits as tight as possible, but thats also helped by the STOL characteristics of the aircraft I fly. Thinking back to the time when I first started circuit training, personally, I sometimes wished that the downwind leg was twice as long as it was.
By the time I'd lifted off, climbed to 600', turned x-wind, climbed to 1000', turned downwind (over the gasometers!), levelled off, let the speed build, throttled back, let the aircraft settle down and trimmed it, it was time to call 'downwind' .
Then it was time to do the downwind checks, (if I could remember them), correct the height, watch the heading, corect the height and speed and hell we are over the lakes turn right, head for the inlet on the river, carb heat reduce the power keep the nose up looking for 65 lower the flaps and lower the nose trim for 65 is there any other traffic watch the speed do I call the tower? turn base ignore the PAPIs watch your attitude getting low getting slow etc etc etc.
So yes, I certainly needed all the airspace I could get and It didn't get any easier for another good few hours. Add in another 3-4 aircraft all flying circuits and the necessity for a large well-defined circuit becomes apparent.
If I visit the airfield where I trained, then I will use those same landmarks, not because I want to, but because that is local practice and procedure and I don't want to turn inside someone in the circuit, just because I can.
So the circuit size has to accomodate the least experienced pilot, who will need the most airspace and that circuit gets fixed by convention. And we haven't factored in noise abatement.
And yes, I do get a bit miffed, following a Cessna/PA28etc downwind at homebase,getting to my turning point, only to see him sailing off on a long downwind leg when I know that I'm going to have to follow him.
I also think that its human nature for us less experienced pilots, when visiting an unfamiliar airfield, to fly a slightly larger circuit than normal, just to get the feel of the place.