Option, ruleset option.. It's a bit of a pointless difference in this case. The only thing that changes is the difficulty of accessing the feature. Someone can easily write a "mod" where the only thing that happens is "unlocking" more/bigger bases. So all you did by making it moddable instead of an option is make it more tedious to use the option. I guess the converse is that a mod which reduces radar range could conveniently set the number of bases from within, instead of saying: "recommended bases: 10."
Minimal pros and cons.. As I said, a pointless difference... Except for one's philosophy of modding. For me modding is about adding entirely new content (new crafts/armor/aliens/weapons/etc.), not changing a basic feature (why 8, 6x6 bases? So arbitrary, such a basic thing to be able to change). But if you think otherwise, fine, let's make it a mod. As it is, neither the option nor the mod option is in, and that's unfortunate.
Psionic LoS is a game breaker for sectoids, and at least a big nerf to ethereals, from my experience. Attacking their bases/large UFOs used to be a pain with soldiers going nuts pretty often. It was especially bad earlier in the game. Now, I couldn't care less about the psi-strength of my men, if an alien is in LoS, I shoot it down or walk around a corner. I never used psionics much myself because it made the game boring, but the change for aliens is very significant. Of course, that could be a mod. Maybe we would finally see the "LoS Mind-Control; no-LoS panic" that everyone seems to want.
"but also enables expotential growth, and I hope I don't have to explain what that means." Why don't you give it a try? We'll see if your teaching abilities match with your condescension.. Actually, don't. In a game that already allows users to change the manufacturing time and selling price of stuff, worrying about exponential growth is ridiculous. If someone wants to exploit the game, they just have to create a one engineer-hour, 100 millions $ item. The effort to create multiple bases to manufacture ever more is totally inefficient if one's aim is just breaking the system.
This dictating of how other players "should" play their game, or what they should (not) have access to is weird to me. It's a single player game. Everyone should enjoy it the way the like it and it has no impact on your own enjoyment of the game. If it were to become a multi-player game, sure, worry about balance, but now?
Similarly, changing base sizes allows bigger main bases, which some players might enjoy instead of having to spread out their effort. It makes everything easier to manage since you don't have to move stuff around between storage bases, manufacturing bases and research bases. Changing efficiency of facilities does that, sure, but then you change the capacities of a starting base as well, unless you create two-tiers of facilities, with more efficient "advanced workshops" available later. Those methods are not identical, nor mutually exclusive, and Fenyo has demonstrated that you can do both infinite bases and infinite base sizes in a very elegant way. I think it would be nicer to have the option, especially since it is already implemented.