EEG and MRI are based on two completely different physical measurements. They have nothing whatsoever to do with each otyer, in terms of why they work. Medical EEG machines are very small, and their size relative to MRI machines does not factor into how effective the EEG is.
I mean, would you doubt that a stethescope can work, because it's so much smaller than an MRI? No, that would be ridculous. Same with your comparison vs EEGs.
Just read the WP articles on MRIs and EEGs. You'll understand it.
"Confirmation bias" seems overly harsh. EEG does actually measure brain activity and it's certainly useful for some clinical/research tasks--if you don't mess it up (which is very easy to do). The trick is that you have to play to its strengths, which involve measuring large-scale activity patterns, like sleep (or epilepsy). If you want to measure something very localized, you need another technique (ideally with a hole in the skull).
In fact, I'd say that there is no overall "best" tool.
fMRI has the best (non-invasive) spatial resolution, but since it relies on blood flow, the temporal resolution is sluggish.
EEG has great temporal resolution, but even with fancy source-reconstruction techniques, the spatial resolution is very poor. It's certainly useful for some things, especially those related to global "state" factors. It's also very portable--if you can control EMI and movement artifacts.
MEG is something of dark horse: very good temporal resolution, and the spatial resolution often good--mostly. Since it relies on detecting magnetic fields, it cannot detect neural (electrical) activity that is radial to it. The other big drawback is that it required a large and expensive system with cryogenically-cooled superconducting detectors. However, the newer OPM detectors are cheaper and work at room temp, so more real-world things are possible.
fNIRS, PAT, and ultrasound seem like they might be good in some applications too.
I'm not an expert. I did some undergraduate courses in neuroscience, and one of those covered how various instruments work, including MRI, EEG, and a few others. I would invite anyone with a better education to correct any errors they can identify in what I've said.
And yes I DID just refresh myself on those WP articles I mentioned :-) and they seemed pretty well written, to me.
I also owned a NeuroSky a while back, and IMHO it was not very useful... But that's because it was a toy, not a medical device. Same underlying measurement principles, but very different in terms of actual operation.
One of the main differences is that medical devices are always attached to bare skin with conductive gel applied under the sensor. Also, medical devices have more sensors. This vastly improves the signal quality, as compared to the toy devices.
In research work, medical EEGs have been successfully controlling computers for several decades, long before NeuroSky or the Necomini ears came to market.
Tl;Dr, you don't need an FMRI to control a computer... EEGs work fine, but none of the existing EEG toys have been particularly well designed in that regard.
I mean, would you doubt that a stethescope can work, because it's so much smaller than an MRI? No, that would be ridculous. Same with your comparison vs EEGs.
Just read the WP articles on MRIs and EEGs. You'll understand it.