Well the majority of people who have played Dwilight disagree with you. Besides, the islands are not too narrow. Realms being too large is a problem caused by players, not by the game. We can see this by looking at Atamara, where it took OOC means to break up the gridlock on that continent, even though it is much MUCH larger and wider than either island on Dwilight.
Besides that, I've been on Dwilight for a long time. Do you want to know why most of the people left? It wasn't the travel times. It was the fact that the western half was overrun with monsters. Travel times had nothing to do with it. In fact the size of Dwilight as a whole was a large draw, as it meant that one realm or alliance of realms couldn't control the whole of the continent as we've seen happen to Atamara and Far East. Even when the Astrum/Corsanctum/Morek Empire Triple Alliance was still a thing, the west was largely able to determine their own fate, with realms like Asylon and Niselur (and sometimes even the Farronite Republic) actively fighting a war with Astrum without having to worry about being teamed up on by the Morek Empire and Corsanctum. Meanwhile the south west of the continent had their own diplomatic sphere that was largely independent of the rest of the continent. That kind of thing was unique to Dwilight, where independent spheres of influence actually had space to form.
I can attest. Back when I was still somewhat of a bigshot in Luria, I mostly had little or no idea what happened beyond the Divides. For the longest time, Luria was focused on dominating the southeast pocket of the island, in between waging war amongst themselves. I don't think a Lurian army even went past the Divides until they started tangling with the remnants of the SA block.
I like it that way. Dwilight puts something of a limit on people's ambitions of dominating almost the entire island.
