Even though it's a shame to have to let players forced to sit out due to raid capacity is reached. It's nigh impossible to do it any other way. A completely dynamic system would be impossible to balance. As e.g. 30 players vs. 6 players would make a vast difference in allowed positioning, boss skill rotations, etc.

Small variations could be better balanced, e.g. 8-man could probably be squeezen in a 7-9 or possibly 6-10 player range. However, in practise what you'd quickly see in that case is the question: "But what about our 9th/11th friend?".