Why do cyclists use thin bottles? I got very frustrated when shopping for bicycle bottle holders because I almost wasn't able to find thick ones (ie, larger, longer, or higher capacity). I just found some and immediately ordered them, hoping they will turn out okay. But why was this so difficult?
I keep seeing pictures and videos of cyclists putting 3 bottle holders on the frame between their legs, and sometimes I even see bikes with 4 bottle holders somehow fitted to the fork. Clearly, tourers are not content with fitting one or two bottles to their bikes, 500 ml or 950 ml (the largest I was able to find in a brick&amp;mortar store) each.
So why are virtually all bicycle bottles so small, especially given that tourers basically live on their bikes and that cycling is a sport that really makes people sweat? I get that they cannot be super long because otherwise they wouldn't fit in the frame, but why are all the bottles 7 cm in diameter, not like 10 cm? That'd be more than double the volume at the same height and if you can fit a 950 ml bottle and a 500 ml bottle inside a normal frame, that increase would get you to 3 liters.
I never did touring and plan to start my first tour soon. I only ever did daily trips and carried big bottles in my backpack. But someone told me that carrying a backpack is a terrible idea when touring. So if there are problems I'm running into by going for big bottles, please tell me.
Inertia.  Bottles are about that big because that's how big bottle cages are, because that's how big bottles are.... repeat.
Another cause is that a 10cm bottle would be larger and harder to hold/easier to drop while riding.  Most riders would drink while rolling on the bike, so its potentially bumpy, with a layer of sweat/sunscreen/rain making things a bit slippery too will add to drops.
Lastly - added width will poke out into the airstream more, contributing to a drop in aero efficiency.  There are some expensive bottles that are deeper vs their width but they cost a lot (hundred dollars a bottle ?!)  and their overall capacity is probably no-more than a regular bottle/bidon.

The width also limits the chance of clipping one's bottle with your feet while pedalling hard.

Later: you reminded me of the Growler Cage - its designed to hold a 64oz jug (about 1.8 litres) and the vessel is between 4&quot; and 5&quot; wide (100-125mm) depending on material.  You'd want to avoid a glass/ceramic one, and would choose stainless steel or plastic.
Also be leery if you're transporting anything across boarders/state lines or into a jurisdiction with different alcohol laws - even when filled with water, these look like they might hold booze and could attract legal and/or criminal attention.

Downsides of this is that its enormous, adding significant mass to your bike and only held on by two bottle cage screws.  Those might be enough for a single bottle, but this is ~twice the weight and has more leverage on those same bolts.
Also, as reported these are likely to hit your feet, pedals, or cranks on every rotation.  That gets annoying really fast.  I'd expect to tap it with my calf muscles or trousers too.