As you (perhaps automatically) expand and collapse the cluster, you'll need to make sure to communicate to all nodes what the new cluster size is. If some nodes don't know the correct quorum count, split-brain!

Also, coordination services are typically critical, so its important to isolate from to the bugs in the adhoc code you're writing for your web tier, a crazy query in your database, etc.

It's much easier and safer in practice to just have 3 or 5 nodes running the coordination in isolation.

Edit: more reasons -- It's easier to deploy a coordination service to 5 nodes than 500. It's easier to debug 5 nodes than 500.