When you use the ShowTree directive with a specific handle, you are still grabbing that part of the tree that gets you to that handle ... you're getting all the intermediary nodes. When you specify "minimal", "mostly", or "maximal" results, you're basically filtering node elements. In effect, Apple is sending you XPath results. Although it has loads of optimizations, XPath deals in whole XML trees ... so yes, the bigger your tree ("site") is, the slower the web service will feel.
However, I'm willing to bet that any slowness in how the web service feels has more to do with network latency or some other factor. Even very large sites will only have a limited number of nodes (< 10,000) and will only constitute a few hundred kilobytes of XML data ... and iTunes U sites have limited depth. If it's something on Apple's end, the likely reason is not the size of your site, rather the number of requests hitting Apple at the time, all sites considered. If you had, say, 100 courses and increased that to 200 courses, I doubt the web service would be significantly slower.
Still, it is possible that Apple might not be able to return results in a timely way. If so, you will get a response from the web service that says which requests went unfulfilled ...
<div class="jive-quote">From the Admin Guide:
In order to return a timely response, iTunes U may not process all of the requests in your
web service document. If this occurs, iTunes U returns a message with the response
indicating which operations were not processed.