Actually maximum transaction size and maximum block size ARE connected. There are currently no limits on transaction size which means one transaction can be the size of the whole block. To actually restrict it to 1MB requires a fork that makes it part of the consensus rules.[...]
I don't have an opinion either way since I don't know how realistic the long term requirement for a >1MB transaction is. Perhaps it could be the collective transactions for one massive company for a day or something, not sure...
Interesting, thanks. Would there be a way to restrict only legacy (P2PKH/P2SH) transactions? In this case, we could leave the way open for Segwit-style transactions with more than 1 MB.
Anything can be set into rules with a consensus change and fork of some kind. The issue with restrictive changes - as we've seen with 1MB blocks - is that in the future it becomes far harder to undo them again if they proved to be a bad choice and real world use cases change.