I found a 256k intro to be a pretty good balance, constrained enough that you don't need a pro-quality art team to look good, but still enough space that you don't have to go too deep into procedural generation and compression.
Disagree. Yes it's hard, but all good demos are hard.
The difference is that you can write a 4k as a one-person project, enter a competition and have a chance to end in the top-three.
As soon as they get bigger, and IMO this is already the case at 64k, you need a team of at least 2-3 people to be competitive. You're going to push as much code/data into 64 kilobytes, and once you get the hang of this, you'll realize this is in fact already an ocean. There's no way that a single person is writing the audio synthesis engine, the musical score, texture generation, model generation, scene direction, animation sequencing tools, and whatever else. Yes, demosceners are very interdisciplinary so certainly a single democoder could take on a few of these roles. But if you want to be competitive in the 64k compo and win a prize, I'm going to argue that these are just too many roles for a single person to really excel in all of them.
For bigger demos, the expectations are even higher, and I really can't imagine doing it as a single person (except with no intention to win).
I don't know about 4K vs 256b. A particularly appealing format is amiga bootblock, which is a little under 1K because a signature is needed.
With no limits, you'd be going against large groups with much experience. A new scener stands no chance.
Those categories you would have at every party. Usually times categories for PC/Amiga/C64. The 256k or 256b or the 96k game categories were usually one-offs or specific to a party.
Now it's been about 15 years since I was active in the demoscene, so maybe 256k demos have become a thing in the mean time. But I would think that's silly because going from 64k to 256k doesn't really give you a new world of possibilities, it's just a bit bigger than 64k.
There are 64k's that show eye candy which can compete with the big demos, yes it's hard but not a lot of big demos are doing things you couldn't do in 64k. Why put 256k in between that? It sounds like a category for people that started out writing a 64k and then ran out of space.
I'm really curious, name me one thing you can do in a 256k that you simply cannot do in a 64k? (for the other categories these have easy answers)
And you're right, there's nothing really that you could do in 256k but not 64k, it's just much easier to fit your assets and code into the limit so you can spend more time on the demo itself and less time on space optimisation, so it's more casual-friendly.
Find out if you like creating things like that, and then level-up the skills as necessary to make it completely your own.