Thanks for your questions.
I started a discussion on this topic here, since I am curious about the opinion of people in this regard: The "Open" Iconostasis
You are correct, as far as the fact that it was designed in such a way to allow for larger or smaller icons. The icons that are there currently were the ones that were on the small, bi-fold closet doors which used to serve as our iconostasis: Bi-Fold Closet Door Iconostasis
Part of the reason we have the smaller icons is financial. My preference would be to install larger ones - perhaps tall, full figured ones which reach the top of the iconostasis and ideally ones next to the North and South doors as well - but we do not have the funding for that at present. For now, we have framed the former icons and attached them with L-brackets to the iconostasis.
At the same time, I would not want to block the view entirely of the altar area. This I believe is in keeping with earlier Byzantine practice. It was a later development to block the altar entirely from the view of the nave. The curtain serves the purpose of respecting the Mystery present in the Church after the Divine Liturgy.