The local store can't be decreased in size, since that would break existing programs.
It could be increased, but that would increase latency as well, making programs slower, especially existing ones, which expect a six cycle latency. Also an increase has zero benefit on existing programs (unlike caches).
The latency of the local store is a function of its size. Lowering it is out of the question, signal propagation delays increase with smaller geometry, increasing latency is bad for existing code because code is statically scheduled by the compiler (or manually by the coder, *ugh*) to deal with the six cycle latency.