In fact, arthropods can't grow to a large size. But being small also means that an arthropod has a larger relative surface area than a human, so it loses more water. A glass of water evaporates more slowly than if it was spread out at a whole lot of little droplets. Thus, many arthropods reabsorb water from their wastes, and have waxy exoskeletons. Several tiny parasitic wasps can feed on just one caterpillar.
Metamorphosis allows an arthropod to be two or more different animals.
Often the larvae eat different food from adults, thus preventing competition between the two stages. To humans, many insects are pests as one stage and beneficial in another. Each metamorphosis stage focuses only on one task. The body is shaped accordingly, with no wasted parts. Often, one of the stages is also geared towards dispersal.