Tools need to match your technique rather than your lathe. The same goes for speeds and feeds.
If you are a 'gentle' machinist then you won't ever have issues with using small tools and wonder what the fuss is about, and vice versa.
If you are used to HSS then you will get poor results with carbide and again vice versa, at least unless you bear with them and 'unlearn' your old technique and developed a new one.
Even this isn't the whole story as the style of insert you use, the geometry of your grinding, the sharpness of the tool and the condition of the lathe all play a part as well.
Ultimately most tools that will fit in a lathe can be made to work satisfactorily if the lathe can run fast enough and is rigid enough for the tool (you can always slow down or reduce cut for a weedy tool).
Toolpost capacity is an indication of the size of tool your lathe is expected to use. With inserts in particular it is possible to 'dial in' material, insert type, feed, speed and depth of cut and expect to get good results – but only if your machine is up to the task, and the results may take you out of your comfort zone (I know ripping off swarf with carbide flat out even on my small lathe is quite scary!)
Ultimately, what gives the best results for YOU can only be discovered by experiment and experience.
Neil