There's no correlation between larger block and processing power (mining hashrate). With larger blocks, average transaction time/fees will be reduced (with assumption all other variable such as average transaction created per second and average block time remains same).
If all of that is true then how come Bitcoin doesn't have a larger block size?
Basically because trade-off between transaction/second (TPS) capacity and cost to run full node, while majority of Bitcoin community prefer cheaper cost to run full node.