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In the hakdama to Be'er HaGolah, the Maharal explains that the most intense kedusha (holiness) is always expressed in the smallest, or most condensed, manifestation in this world. Thus, the smaller the area of the mikdash (temple), the greater its level of kedusha. So too the Jewish people, as the holy nation, have the smallest manifestation in this world.
The Jews never started out having a very large population. In fact, when you read the Torah you see that the entire nation of Yisroel coming out of Mitzrayim is numbered only 600,000 men! (Of course, the Yidden were just starting out.) Another reason, and probably a better one, is that the Holocaust greatly affected the population of Jews. Plus, you might ...
Dvarim 7:7 and Dvarim 4:27 would be my guess. The LORD did not set His love upon you, nor choose you, because ye were more in number than any people—for ye were the fewest of all peoples And the LORD shall scatter you among the peoples, and ye shall be left few in number among the nations, whither the LORD shall lead you away.
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