This is very logical. The bigger the market, the more competition you have. When the whole idea is to always be playing songs your target audience loves, those songs that are common account for fewer titles. Since listeners tune to several stations in major markets, winning the most time spent on your station by playing the best songs means you win in the ratings. The better you do in the ratings, the more the station gets in revenue and the longer you get to earn a paycheck from that station. In short, everybody wins.
The lower the population, the fewer the competitors and almost by default, the longer time spent listening. As a result, a larger playlist is usually utilized because of longer listening times and less competition. In smaller markets there might not be another competitor, so listeners 'put up with' a marginal song better than in markets where they simply don't have to.
Back in the day lots of stations opted for the tape based formats, even for live stations. The reasoning, according to one boss, was that the average program director lasted about a year before getting to climb a bit higher on the radio ladder. Each new program director meant the station changed so much he felt the tape format offered him the consistency in his small market. And I might add, those reels came in handy when you needed a bathroom break. The downside was it seemed like the song you hated most always popped up on your shift.