During the 2nd gen top agencies had just one gg at the time with the exception of SM who had 2. So you naturally had a lot of smaller agencies filling in the gap which gave us groups like Tara, BEG, Secret, After School, 4minute to name a few.
3rd gen was more or less the same. We had Twice, Blackpink, Red Velvet and that's it basically. So again we had girl groups like Mamamoo, Gfriend, Oh My Girl rise.
Now Hybe alone is about to have 3 ggs(4 if you count Geffen) within the same generation. JYP has 2(4 if you count NiziU and VCHA, both promoted in Korea), SM will be debuting 2nd gg soon. All within one single generation.
If you think about it, the position of "small companie groups" are now actually taken by top midsize companies - Starship's Ive, Cube's Gidle, Black Eyed Pilseung's Stayc are this gen's "dark horses". By the time we actually get to midsize level companies we are already deep in the flop zone. IST's Weeekly (Apink juniors), RBW's Purple Kiss(Mamamoo juniors), Woollim's Rocket Punch(Lovelyz juniors), FNC's Cherry Bullet(AOA juniors). This is just sad. Even going viral doesn't help anymore. The hype vanishes as soon as new shiny big company gg drops. Cause people have only a limited attention span for idol groups, you can't expect people to keep up with so many groups.