It makes sense to me. Each sale of a bag takes time. It's no good getting a higher percentage of a small bag if he has to run around for an hour to sell 1 small bag and could've sold 1 large bag in that hour instead.
If the majority of users take the small bag, which seems logical, then I can't imagine you would be able to upsell them easily to a product that was 5x the price (indeed the author acknowledges that), the upsell opportunity there would be to a medium bag, but as there is no difference to him financially in the sale of a small or medium bag, what is his incentive?
...If there is no difference to him between a small and medium, doesn't that instantly explain why he's trying to upsell them to a big bag even though it's so difficult?