There are two sides of the same coin. If you look at stellar or ripple, they have very big total supplies and are doing pretty well, if you compare their prices with all time lows. But on the other hand, I agree with you and believe that projects with small total supplies are more perspective.
In my opinion, this is due to how much the project covers the Earths population, that is, how grandiose the project itself is. The more often a coin or token is used, the more they are needed. If there are not so many coins or tokens, perhaps this will cause them to rise in price, however, at the same time it will cause inconvenience in their practical use. Nevertheless, an optimal balance is needed here.