(After a while, these "how do I fix my drummer?" threads make me want to e-mail my contact information and some demo mp3s...)   

Personally, I wouldn't worry about the size of his kit - I stand by my earlier post, that the problem lies with the drummer, and not with his equipment.  Removing x-number of components from his kit will not guarantee that he will play tastefully, that he will pay attention to the rest of the band, etc.

Speaking as someone who is not only a drummer, but also a vibes and steel pan player (giving me the non-drummer's perspective on these things), since you have substantive problems with his playing, with difficulties in communicating onstage, etc., I'd approach him with those issues specifically.  Don't worry about the size of his kit, or the number of pieces he uses.  For example, if you and your bandmates have difficulty communicating visual cues to him - which I agree, is an important issue - then tell him, "We need you to be better able to respond to visual cues.  If we can't communicate with you that way, you won't be able to do what we need a drummer to do."  End of story.  If he can solve the problem by moving a cymbal, raising/lowering his cymbals, rearranging his kit, removing parts of his kit, sitting higher, watching more closely, etc. - then let him address the issue.  If he can solve the problem without switching to a smaller kit, does it matter?  The problem is solved.  If he can't or won't facilitate the communciation of visual cues, then find another drummer. 

You've expressed some valid concerns here regarding your drummer.  However, I don't agree that having him use a smaller kit is a cure-all, or in any way guarantees that your concerns will be addressed.