Hey flagamuffin Sorry it took me a while to reply. I saw that you mentioned me but couldn't answer at the time. I was first exposed to Dunbar's theory as an undergrad and I utilized aspects of it to determine the origin of modern complex language. I actually think there is sufficient evidence to continue testing his social brain hypothesis. I have yet to hear a more convincing hypothesis. In the primate world, large group size is almost always selected against. Group size is usually an intricate balance between ecological resources and predator defence. Ecology selects against a group's growth because a given environment can only support so many individuals. However, primates in groups have the ability to defend themselves from predators. So most groups will grow an increase their defence until they can no longer support such a large group, and then a fission event typically occurs. This is simplified and demands species-specific attention in most cases, but the general rule is valid.
How this relates back to Dunbar's hypothesis is pretty simple. It is hard to balance a lot of social relationships (ESPECIALLY WITHOUT LANGUAGE). In fact, I think it is impossible for any primate to exist in groups larger than 200-250 without language as a bonding mechanism (which was part of my undergrad thesis's argument). Part of the reason it is so difficult is because of coordination of fair resource allocation (in relation to what I stated about the balance between resources/predation).
Cue the social brain:
Therefore, primatologists have tried to associate neocortex size in extant primates with group size. We do see a strong correlation between relative neocortex size and group size. Interestingly, we don't see the same correlation among all mammals (which makes things more complicated than Dunbar would have liked). However, for some unknown reason the correlation is strong among primates. Perhaps it is strong because primates specifically evolved to be highly social. Either way, if we apply this theory, we see another strong correlation: expansion of hominid brain size is correlated with increase in group size. That is pretty strong support for Dunbar's hypothesis in my mind. And if we accept this hypothesis we can easily see how this would make sense in the modern world. Social science studies have shown time and again that social skills are the key to financial success and for the success of maintaining strong long-term bonds. Although it would be hard to test - this could have certainly been adaptive in the Paleolithic.
If you have any further questions, or if I didn't explain something clearly, feel free to let me know.