Prof. Dav, thanks very much for responding and letting us know some of the reasons behind the decision.
As others have said, 10 players in North America qualified without the automatic invite of nationals or worlds. This is a far cry from the '40' it used to be with rating invites, very often in addition to the worlds and nationals automatic qualifiers.
Dav, while there is clearly reasoning behind you (and your team's) decision, I respectfully think you are making an important mistake. I think you are worrying too much about worlds itself and not the full year leading up to it. It's the full year leading up to it that the players experience. Very very very few are going to care if the room feels empty or not empty. Honestly, I don't think changing the number of invites would drastically change the number of people milling around worlds. You would still have an enormous grinder either way.
I think many people would agree that more important than making sure worlds has the exact X amount that fits the venue, or the arbitrary X amount you target (128), is that we have a system that is accessible to players. Worlds is one weekend of the year, but the chase for worlds lasts all year. I really think your team should be primarily focused that the 'chase for worlds' is reasonable.
The player base as a whole has grown tremendously in the past 4 years. Harder to quantify, but plainly evident to any player is the competitive player base has grown by at least a factor of 10. You guys finally did the right thing in making worlds bigger. Don't try to keep worlds the same number of players each year, keep the reasonableness of getting to worlds each year the same (or marginally close to that). Going from 40 in North America from a few years ago, ~60 last year, to 10 is not doing that. Even keeping it at 40 is not doing that.
While having 100 players at worlds may fit your notion of an ideal size for worlds, the players will feel the reduces chances all year. Reduced chances, reduced hopes, reduced interest. For those who choose to go for it, greatly reduced finances, which will eventually lead to reduced interest. Changing to 500 while also making regionals on different days is daring players to spend big on travel. No one likes this. The people who do it won't be happy spending so much money (that goes to the airlines, not to Pokemon anyways), and the people who refuse to spend will quit, or lose enough interest to play competitively, reducing sales, reducing attendance. Players who are just starting to be competitive will be discouraged. New players will be discouraged. Veterans will take a look at their wallet after a while and be discouraged. You see tons of players already talking about leaving the game from this news. I don't think anyone is leaving the game because 100 vs. 200 players made a venue one weekend of the year feel too small or too large.
If you want worlds to stay small, you need to come up with a system that still feels accessible to players. Some sort of tiered system with a build in level (that you have to qualify for) between the smallest tournaments and worlds. Make it prestigious, interesting prizes etc. Something players can feel accomplished in reaching but isn't impossible to reach. You could have a circuit in North America and Europe at the very least. You need to give players something to shoot for if you're going to make worlds this small, make spending money on airfare that much more important etc. We don't have any of that though. There is only one goal in this game for most players, and that's the world championships, which you are making very inaccessible now. A few hundred dollars to attend nationals after spending money all year isn't going to make anyone excited about their 300 CPs. I'm guessing the above isn't likely in the near future though, so until then worlds itself is the goal of all players and it needs to stay accessible.
(Yes states, regionals and nationals are prestigious events, but they are not something players work toward all year and as such won't keep players around most of the year. Plus a single event has enormous variance in Pokemon, we all know that.)
(For clarity, I had not listed nationals before SD_pokemon's post, but the same point remains)
tl;dr: Focus less on making worlds X size and focus more on making worlds (or another prestigious goal) accessible to the player base. The latter is what affects everyone all year.