True about the diminishing returns, in most cases (well, in all cases but some guys can maintain speed and agility better than others).
It makes a big difference that Lesnar is so much bigger than Fedor though. If size and strength didn't matter when it came to fighters, there'd be no need for weight classes.
Whether little guys want to admit it or not (and I'd consider myself a little guy, at least height wise) size and strength is an advantage when it comes to combat.
Or, could it be that they'd rather get paid millions of dollars to play in the NFL or other more lucrative sports? Also, not everyone enjoys getting punched in the face or the sheer violence of combat sports. So, I'm sure you lose some candidates to that as well.
If MMA started paying comparative, or greater salaries to pro football, I bet you'd see a lot more linebacker (or even Defensive end) sized heavyweights going into MMA. Lesnar isn't even the top of the food chain, he couldn't hack it in the NFL, even with his athleticism. There are guys out there who would make him look small, slow and weak.
Alexander Karelin could do a full splits, back flips and was incredibly quick and explosive at 286 lbs. David Robinson (NBA center) could walk the length of a basketball court on his hands at a height of 7'1" and 250 lbs of weight. There are NFL left tackles that tip the scale at over 300 lbs and can run a sub 5 second 40 yard dash.
So, while your statement might apply to the general public, make no mistake that there are individuals of that size who are incredibly quick, agile, flexible and coordinated. Olympic gymnast caliber? No, but you won't find anyone over 5'9" (and even then it's extremely rare) who has that level of agility.
Very true, he's still very wet behind the ears. I honestly think he's going to own Mir though, he should have the first time, and I don't think he'll be so easily surprised by a very obviously set up knee bar this time around. I don't think he'd beat Fedor right now either, just think he's got the raw talent to reach a level that would allow him to beat Fedor.