Span of control. As you get above that number of reports, the manager is splitting their attention to the point that hot/cold spots are inevitable.
IMHO, it's correct but that doesn't mean it's good or desirable that things tend to bog down in wider / deeper org structures. Maintaining high efficiency and effectiveness in large org structures is hard to do and that's why the exceptions are notable and worth studying.
To study single-mission mega projects, the classics are the Manhattan Project, the Apollo missions and the first ICBM systems. The management of these projects were awe inspiring.