While there are halachos for the size requirements of each letter (as brought down by the Mishna Berura in Mishnas Sofrim - found in Chelek Alef), these are l'chatchila. Since spacing can be difficult, many sofrim (especially beginners) will extend letters to fill space, since space is an issue an separates the various parshiyos in the torah. So, as long as the letter fulfills the halachic requirements of its shape (not completely the same as the halachic requirements of its size, though they are inherently interrelated) it is kosher. But, while kosher, it would not have the status of being mehudar.
As a side point, sometimes there are specific places where Halacha/mesora does require a size change of the letters.
ADDED AFTER ORIGINAL POST:
In regard to matters of l'chatchila and b'dieved this is stated both explicitly and through basic understanding of what the Mishna Berura writes in Mishnas Sofrim and in the Beur Halacha. Specifically, when he discusses the kashrus of letters and what to do in a matter of safek, namely sheilos tinok. This is a process where an average child is asked to read the letter and determine what it means while other letters around it are covered up to avoid using context. He also discusses the size of each letter based on kolmus length (the width of the tip of the quill is considered a single kolmus length) from which appropriate letter proportions are determined. Finally, as to my assertion of beginner sofrim versus those who are more skilled, this is a comment made based on my own experience in learning safrus And producing my own writings.
