The thing is the changing world we live in today dictates the defence priorities, gone have the days of a battlefield with half a million troops facing off in conflict. When I joined the Army we had 6 operational Warfighting Divisions, for those that are unaware the peacetime strength of a Division is 10 - 12000 but in a time of tension they are reinforced to around 16000, four of those Divisions were based in Germany forming the 1st British Corps, they were there because of Cold War tensions with Russia and what was then East Germany, when I left in 2004 there were just two, today there is just one Operational Division. So in our case, we have to ensure that with smaller force sizes comes better training, better equipment and therefore improved capability.
The US has the numbers and they have the technology, in todays climate technology reigns supreme, even over force size and training, no country would realistically field an Army of 100,000 plus simply because that force could be decimated from an armchair (so to speak).
Defence costs lots of the hard earned stuff and is difficult for any government to justify significant investment where a real and imminent threat cannot be evidenced, I mean 65% of the annual defence budget goes on service pensions that cannot be cut (happy to add I take my slice of that cake) so they don't have huge wiggle room to make cuts without force reduction, I see tanks have also taken a hit, I think only 3 Heavy Tank regiments are left, there used to be 12 in the nineties.
As for diversity in the Armed Forces, they like any other large institution should be a reflection of society in general, for any degree of public support they need to be identifiable and relevant, if they are they are more effective.
I suppose one of the few benefits of being a smaller force is that you can be more "choosy" who you select and those that are can be trained harder and better, gone are my days where almost anyone without a criminal record could walk through the door.