Frankly, I think they CAN do smaller models, it's just that the game system doesn't well support them and it'd be a very labor intensive process.

Here's how Rich Baker did PT's in 1/900 for Axis & Allies War at Sea:

A one-piece casting, with the boats molded integrally with the clear plastic base and painted. Adapting this to Sails would mean a new lid-piece with two or three generic small vessels, could even use the same hulls for all nations and just plug in brig-rig or schooner-rig masts to suit.