This was definitely true at Temple too. The primary complaint of our D4 student guide was that there were a lot of regulations and faculty checks designed for 'caution' on the part of slower students. These apparently cannot be circumvented even if you feel very comfortable with the material.
So I don't think annoying red tape is NYU specific.
EDIT: I personally like a larger class size, simply because it allows for a bigger mix-up of people. You're bound to meet a group of people that think in similar ways and adjust to similar mores that you do, simply by the random distribution. We all talked to students during our lunches, did any of them mention class size as a particular problem?