Set in the mediate future new gene splicing is the new game in the market, we took over an island in the pacific ocean and set up a a natural habitat for the dinosaurs free of any kind of human contact. Now my team of scientists told me that these hybrid dinosaurs have to be small at least half as big as their original counterparts... so is there a good non political or ethical reason for dwarf dinosaurs? For now the island only have 2 female adult Iguanodons as tall as a 10yo human child... speechless right.
I'm reading this to mean that you want to establish a wild population, not a petting zoo or game park. If so, an excellent reason to miniaturize the dinosaurs is that most full-sized dinosaurs (and nearly all the iconic ones) are so big that it would be impossible to have a stable ecology containing them without a huge landmass. No island would be big enough. (Well, maybe Australia if it was wetter.)
A stable ecology needs predators. Otherwise the herbivores would quickly strip the land of vegetation unless they succumbed first to disease because their numbers grew too much and they became too crowded. (Think deer in the Eastern US.)
You need a minimum of maybe 300 of any species for it not to become too inbred in the wild. 500-1000 would be better. So you need say, 500 predators. 500 predators require maybe 50,000 prey animals to sustain them -- essentially, there need to be enough prey that they can reproduce as fast as the predators eat them.
50,000 elephant-sized herbivores would require a huge amount of land. 50,000 deer-sized herbivores would still be too many for most islands, but at least we're now in shouting distance of a viable ecology that wouldn't need constant human management of the dinosaurs' reproduction.
Economics, dude. And health & safety.
The photos still look just as great (especially if you stage them to make the dinos look bigger) and you can get far more saurians for less money, less space, and less risk of, er, unfortunate events.
Also, mini-dinos should reach full size and profitability much quicker.