Blockstream has no position on the block size debate, other than supporting the consensus building process (whatever the outcome might be). Blockstream's business model does not depend in any way shape or form on small blocks. That is pure FUD. In fact, small blocks are a hindrance to things like sidechains, which generally use much larger transactions for the two-way peg smart contracts. Some of the risks called out in the sidechains whitepaper are that Bitcoin blocks might be too small to contain a return peg, or that full blocks will make it difficult to get a fraud proof on chain before the expiry.
Everyone stands to benefit from larger blocks, but only so long as the network remains decentralized. The debate is over where to draw that line.
(Disclaimer: I'm a co-founder of Blockstream.)