an atmosphere that is ripe with oxygen would support a larger physical being, such as dinosaurs.

Dinosaurs were wiped out by an asteroid, which would change the atmospheric makeup of the planet, and diminish the amount of oxygen, thus shrinking all living beings in the future. Fungus(mushrooms) were the only thing to survive on the planet after the asteroid hit, because they don't need light, everything else died, and here is the really interesting part, human being origins are rooted in fungi.

I think, the reason why human beings are searching for a way off this planet, and are obsessed with colonizing other planets is due to the fact that the last dominant life form on this planet was wiped out by an asteroid, which tends to support the idea that we are not living in a predetermined reality, but a completely spontaneous sequence of events which could yield total extinction via an asteroid, it would only seem logical for life to seek a way to preserve itself as basic sexual reproduction proves is the case. Life's clear purpose is to prolong itself to infinitude, and so, after the dinosaurs, human beings emerged as the dominant, with a clear and obsessive goal to spread across the entire universe, and preserve life.