OK I get the theory. But consider this (and correct me if I'm wrong).

- A lot of different independet people (or pools) are trying to generate blocks
- blocks are chained together
- the longest block chain is the valid one

consider the scenario:

I'm on my own. I generate a block. Now another block is created by someone else. Doesn't that make my block usesless as I have to add my block to the just generated block?

If so: the longer it takes to create a block (i.e. the smaller the pool is), the more likely it is that I do a lot of useless work I do an the lesser profit I get.

I most certainly missing something, but in my head this example makes sense.