First, I want to clarify that I'm talking about the three "group dungeons". (Dark chapel, minotaur dungeon, and Gazluk Keep.) There's also lots of work to be done with the other content in the game -- especially low level content. But that's somewhat tangential here. Someone mentioned the Serbule Crypt -- that's probably the weirdest of the game's dungeons because it's literally 5 years old. It's the only dungeon from "pre-alpha 0" to still exist. It's been the testing bed for all sorts of things, so it has small group encounters, large group encounters, solo areas, quest NPCs, and a ridiculously large level spread of 25 levels (level 5 monsters in the front door and level 30 bosses at the very bottom). It's been the place we figured out how the game works. And as we understand how the game works better, I plan to redo all of the dungeon's content during beta. It'll have a much more specific level range -- maybe levels 15-20, something like that.
So if you're concerned about low-level content -- that's completely understandable.

And we would love feedback on the existing content! (Not in this thread, though, please.) We're working on a bunch of new low-level content that will be added to South Serbule soon, including several large dungeons. So even if we don't immediately change the existing content, we're taking lessons from that content as we move forward.
---
So about these group dungeons -- I don't mean to say that reducing group size is a magical fix for grouping. It's definitely something I'm considering, but it's just one of a LONG list of steps I'm considering. (Beta will be chock full of changes in this area.) My point is mainly that INCREASING the group size would be steering us in the wrong direction.
What sort of changes will we see here eventually? I'm not sure of all the steps yet. But we'll definitely see a lot of ability and treasure rebalancing. The sheer number of offensive mods a player can have right now makes the "large group of glass cannons" approach always viable, and that makes it hard to support other combat roles -- without REQUIRING those roles. (The last support skill, Priest, is waiting in the wings, because right now there's not enough "room" in groups for pure healers -- and Priests lack the offensive versatility of the other support skills like Druid.) I'd like for players to have less DPS overall, and for group monsters to hit harder and have more weird powers -- and give players more ways to counter those powers. But obviously that will require a lot of balancing.
For related reasons, I'm considering rewriting how buffs work. Originally I expected all group content to be 3-man groups, and although that's changed, buffs are still balanced around 3-man groups! In a six-person group, most buffs are literally twice as good as I expect them to be.
So I'm thinking about other ways to implement buffs. Instead of "everybody in the group gets 25% melee evasion", maybe it's "the first X people that are attacked get melee evasion" or something like that. I need a system that scales better, from solo up to the largest group size. I don't know what the answer is yet though.
A lot of the steps we need to take aren't fully obvious yet because there's not enough players doing group dungeons. The group dungeons require higher-level players, and there just aren't a lot of those in the same level range at the same time. I do get some very valuable anecdotal info, but that only lets me make changes a few times. Without a constant stream of people running a dungeon -- dozens of groups every day -- it'll be impossible to keep them in sync with the rest of the game's changes. (This is also true for much of the game's economy: "needs more people".)
That's why we're working as hard as possible to get the game ready for Steam ASAP. (Of course, the presentation needs to be the best we can manage before we put it up on Steam -- but we're working very hard to get there.) When the game is on Steam, with the new GUI in place, we'll consider the game in "beta", and that's when all the fun balancing work can REALLY begin in earnest.
For now, these are just pain points we'll have to deal with. But it will get better. Content difficulty won't ever be as tight as it is in some games, because we're so free-form that it's impossible to predict a group's exact capabilities. But it will be BETTER than it is now. Both for soloing and for grouping!
(Also: often when I post more than once in a thread, it kills discussion. That sucks. I don't mean to dissuade people from posting here! I wanted to weigh in, but I'd love to hear more feedback.)