The smaller ones are more portable and easier to move between job sites. One of my neighbors is home builder, they often have several small generators and air compressors at a home building site, because they can put one on each floor as the crews work and move them as needed.If they are so heavily used then why not a more rugged generator with emission controls? Seems to me that the smaller portable ones are not that fuel efficient; not sure how long lived when used under heavy usage either.
Perhaps the law could be expanded to exclude "clean air" generators. [Apologies; not going to go read the law, maybe generators above a certain size are exempt for all I know.]