The reason they need to be bigger is to conceal the one being hidden.
There needs to be enough heavy colouring in the tattoo to cover, to prevent the tattoo showing through in the gaps of the new tattoo, that is actually very difficult to do.
It isnt just a case of putting another tattoo over the top, the skill is being able to prevent the old one showing through the new one.
I have a cover up, again it had to be much larger than the original to be effective.
As for Douglas's comment "Artwork!? Glorified tracing and colouring in more like." That is just ridiculous! Yes often they are traced or printed on to the skin first, but that is to save time in the studio, they cant all be drawn on or inked freehand, that would be totally unrealistic. Most tattoo artists are extremely good artists, most design their own tattoos.